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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Slagle who wrote (6086)	5/5/2006 2:16:44 PM
From: RJA_	Read Replies (3) \| Respond to of 217614

>>I really believe that there was lots of cold war skullduggery responsible for the fall in the price of oil and gold, mainly to deny the Soviets their main source of funding. Maybe those factors are absent this time. Relying on memory of that time: 1. Interest rates were around 15%, finally peaked 1 yr later at 20%. 2. As POG was heading for 850, there was a meeting of G7 or some such, there was an attempt to monetize gold -- which failed. Right after that failure was announced, the smart money dumped gold. IMHO these two factors were responsible for the decline. The nature of metals speculation is that everyone piles in and runs the price up (as quantity of metal is not sufficient to satisfy all demand at a given price). Once folks stop buying, the metal reverts to its "commercial" value. Now your on a down slide, whch is enhanced by investors trying to get out because price is declining and interest rates are very attractive. In the event that monitization happens, the down side ceases to exist -- as govmts guarantee the gold price and link it to their currencies. However, monitization will only happen IMHO if either: 1. Someone really rich decides to do it -- say the Islamic dinar -- in which it will become the dominant money --or-- 2. Things get so f**ked up that commerce becomes almost impossible with currency values changing daily, the savings of almost everyone wiped out, and a huge cry for money stability. Governments will not easily or willingly give up their ability to print money... cause without it there is only 1. Earn it. 2. Borrow it. 3. Tax for it. There is always spend it -- but the spending will be limited to the gold backing... and what government wants spending limits?