To: Feline who wrote (8232 ) 12/20/1997 12:03:00 PM From: Phil Jones Respond to
Interesting article in the Globe & Mail this morning in the business
section. It's in the At Your Own Risk column, by Dianne Maley. Very
positive for gold bullion, also possibly stocks, whether 1998 brings
inflation or (more probably) deflation. I am not able to upload the
whole article, but the final paragraphs follow:
(Paragraph)....Historically, major trading nations backed their currencies with stores of gold and silver, a practice that has been abandoned in stages. Now central bankers can print as much paper money as they want, Mr. Dines says. The result will be trade wars and currency crises. Then gold will regain its monetary value, he predicts. "A gold coin can be spent anywhere in the world, which is not true of paper".
(Paragraph)....Donald Coxe, chairman of Harris Investment Management Inc. of Chicago and Jones Heward Investments Inc., thinks it's too soon to buy gold. Some time over the next year or so, though, gold "will become a screaming buy". In the meantime, the price will fall further for three reasons: central bankers will continue to dump gold from their foreign currency reserves; European countries are likely to succeed with their plans for a single currency, further diminishing the need for reserves; and East Asians, beggared by tumbling stock prices, have stopped buying it.
(Paragraph)....Mr. Coxe points to a fact most people have forgotten: historically, gold has proved to be a hedge against inflation and deflation; deflation is the greater threat at the moment, he argues. At some point, the U.S. economy will tilt into recession and stock and bond prices will fall along with the U.S. dollar. Then gold will begin to rally. "Gold could outperform U.S. stocks over the next two years", he says.
(Paragraph)....As for how to hold the precious stuff, he says it's safer owning gold bullion than stocks because "only a few producers can make money at the current price of gold".
