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Politics : Gold and Silver Stocks and Related Commentary -- Ignore unavailable to you. Want to Upgrade?

To: SOROS who wrote (9218)	3/21/2005 6:54:03 PM
From: orkrious	Respond to of 18308

what fleck says tonight about the currency markets makes sense. I wonder how long it's gonna take to realize paper is worthless fleckensteincapital.com 'Til Gold Breaks Free of Euro 'Surrogacy' Overnight equity markets were pretty docile, but currency and metals markets saw a good deal of action. The euro was about 1% lower, presumably because the EU Stability and Growth Pact will be amended to give more wiggle room to countries experiencing economic difficulty. (For short, I refer to it as the Fudge Pact.) Though I don't find it terribly shocking that the Europeans arrived at that decision, at least it can be said that they attempt to make rules about how large their deficits should be, etc. -- rather than just basically winging it, as we do in America. Euro Feels Weight of a Lowered Bar That said, the decision will probably be construed as euro-negative in the short run, and the upcoming ratification votes in various countries will cause folks some consternation. In short, the euro will face some headwinds. I decided to sell my euros anboxscored keep my anti-dollar exposure via the metals. That is not to say I wouldn't buy euros on weakness and trade them from time to time, because I will. In any event, as I considered the ramifications of this well-advertised change in the EU Stability and Growth Pact, I thought it ought to be the moment in time when folks realize there are no truly safe currencies, and that gold is the only currency which cannot be debased or abused. My feeling on that score was further reinforced by two news stories today. One of them, which passed on Bloomberg, quoted Hong Kong Monetary Authority Chief Executive Joseph Yam as saying: "The euro may become so popular in this region, it may undermine the stability of international finance." The other story, in the FT, is headlined: "U.S., Germany, France, and the U.K. Face Junk-Debt Status Within 30 Years, Warns S&P." Now obviously, neither of these potential outcomes is guaranteed, and the latter is a ways off. But these types of fears and headlines could at some point make folks realize that most paper currencies are not real choices at all. If investors in Asia have fled the dollar for the euro (due to concerns over imbalances in America), and then they conclude that the euro has problems, it is unlikely, in my opinion, that they will rush back to the dollar. They will look for something else instead. And, as subsequent warts surface regarding other currency alternatives, that will continue to reinforce the view that gold is a better choice. Glitter Is Kicked in Gutter A few years ago when I began buying euros, I assumed it would be a transitory holding for me because I thought that the euro was flawed. That said, I figured that the currencies would have to move a long ways before gold did. But now I have decided that this is the moment in time where gold should be deemed the best currency. So naturally, given all the conclusions I just shared, gold was splattered for 2% today, and silver was hit for 4%, as others obviously did not arrive at the same conclusion. In the coming days, if events line up right, I intend to add to my metal exposure. Though I'm not exactly sure what I'm looking for, I am hoping to recognize it when I see it.

To: SOROS who wrote (9218)	3/21/2005 7:07:37 PM
From: Canuck Dave	Respond to of 18308

We're geniuses, SOROS. And I want a patent on the "precious" thing. Today was just a nasty little reminder that the money printers aren't going to give up all that lovely power they have. I bet Bernanke sits at his Credit Generator Machine after each Fed meeting and mumbles a few "Preciouses" himself. Caveat Emptor, as always. CD