Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (53622)	7/19/2006 7:09:40 PM
From: YanivBA	Read Replies (2) \| Respond to of 116555

I also believe gold will probably be cheaper to collect down the road. There is a slowdown coming and gold still trades as a commodity. I think for gold to stop trading like a commodity and start trading like a currency it has to first start trade like a reserve currency. The gold ETF was a move forward in this respect but to really make the transition gold would have to be adopted as a dominant reserve by at least some of the world central bankers. I believe they would only do that if they would be genuinely disappointed of the USA. Now, central banks are run by economists, a group trained to see the USA as an ideal model state, so to turn this all this love into hate would take no less than an act of betrayal by the USA. What could be this act of betrayal be? I don't think it is very likely to be excessive printing by the Fed because that is just part of the belief system of most economists. However, one solution to over-capacity that will be called for by the public once deflation starts is protectionism. I believe Protectionism by the USA would be accepted as betrayal. If you build a wall that leaves foreign products out you will indeed get instant remedy to the mismatch of supply and demand but once the land of the free starts building walls it will lose it's strongest group of supporters, the economists. When economists start looking for an a alternative to the Dollar that will be gold's only chance to regain its position as a currency. In my mind this is but a slim chance because the economists of the world are more likely to chose a basket of commodities as their reserve currency, but they could also make do with holding just gold. YanivBA.