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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Square_Dealings who wrote (31478)	4/30/2005 7:43:56 PM
From: grusum	Respond to of 110194

"so give it a couple of weeks..." LOL!

To: Square_Dealings who wrote (31478)	4/30/2005 7:56:07 PM
From: mishedlo	Read Replies (2) \| Respond to of 110194

the only way gold will go up is if the Arabs start valuing oil in gold, or a basket of currencies other than the U.S. dollar imo. Why do people keep saying this? It is silly. It does not make a DAMN bit of difference what oil is priced in. NONE. Currency conversion from any currency to any other curremcy takes less than a second. This just has to be one of the silliest ideas out there but I am not blaming you as all the financial sites broadcast this nonsense. Other than Yap Island stones who cares what something is priced in? Why? What DOES matter is where countries hold their reserves. If Saudi Arabia started buying gold with their reserves, yes gold will soar. If they hold more reserves in Euros then the US$ might drop, but just because oil is priced in Euros, YEN, or the Pound does not stop them from instantaneosly converting back to US$ and holding US$ reserves. For that matter, SA could take their US$ now and convert them to gold or Euros or the pound or swiss franks if the wanted to. It could be done in less than a second. Given all the above, who cares what anything is priced in? There is NOTHING stopping Saudi Arabia or any oil producer from selling dollars and holding gold or Euros. Likewise if oil was priced in Euros there would be nothing stopping them from holding reserves in US$. If they did not want to hold US$ reserves then they would not, and it would not matter what the F oil was priced in. It is really that simple. Mish

To: Square_Dealings who wrote (31478)	4/30/2005 9:33:29 PM
From: gregor_us	Respond to of 110194

Gold Should Be Able to Perform, and Express its Value regardless of whether Oil, for example, is priced in USD, or a basket of currencies, or even gold itself. In a way, you are implying that the dollar derives strength from being the currency with which Oil is priced. I'm familiar with this view. And, through certain periods, it "may" be true that the United States derives a benefit as oil priced in dollars is promotive of a float, globally, in dollars. But I don't think advantages which can accrue to a "country" with its paper currency would be there, for gold, if "oil" were priced in "gold." In fact, if we see the dollar-oil relationship through the perspective of equilibrium, we are now in fact accruing the "disadvantages" of having flooded the same world with dollars that is now seeing declines in oil supply. Suddenly, there appear to be no advantages at all, for dollar holders, that oil is priced in dollars. Again, gold strength is absolutely and everywhere measured on a relative basis. The time for gold to perform is now. Immediately. Since oil is doing absoultely nothing, nothing at all to "prop up" the dollar, gold should be able to go to work like a buzz saw on the dollar--or any other currency, or commodity it deems fit to compete against. No, the question of gold's recent performance still lies ahead of us. We're all wondering why. Lots of answers out there right now. None seem quite right to me. LP