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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: JD who wrote (4951)	12/30/1997 1:32:00 PM
From: JD	Respond to of 116759

More thoughts on the future of gold. copy of post on kitco forum 12/30/97 13:03 by 'vronsky' ******************************************************************** GOLD PRICE OVER THE LONG-TERM INCREASES WITH MONEY SUPPLY GROWTH "Money makes the world go-round, the world go-round, the world go-round, money makes...money money money money money" from the movie which won 8-Oscar Awards: "Cabaret" ( 1972 ) . A monetary theory first verbalized by David Ricardo in 1810, and later endorsed by Dr. Irving Fisher in the 1920s: "The price ( dollar ) of gold is related to the money stock growth rate. Thus the price of gold is an indicator of Federal Reserve monetary policy. An expansion in money growth results in a rise in the dollar price of gold, a decline in interest rates, and an eventual decline in the dollar - or ANY CURRENCY WHOSE MONEY SUPPLY IS RAPIDLY EXPANDING!" Nobel Prize Laureate in Economics, Dr. Milton Friedman dedicated an entire book to this hypothesis. In "BRIGHT PROMISES, DISMAL PERFORMANCE: An Economist's Protest," he brilliantly proves the theorem that over the long-term "inflation follows money." Standing the test of time, the well accepted truism - that one of the best fuels for increasing gold prices is growth in money supply - is particularly pertinent in today's international monetary climate. NEARLY ALL the industrial powers AND ASIAN TIGERS are vying to see who can increase their money supply the fastest! Per recently published data the M-3 money supply ( the widest measure of money growth which encompasses M-1 and M-2 ) is exploding AT A BLISTERING 16% ANNUAL RATE, WHICH IS MORE THAN TRIPLE THE FED's GUIDLINES... not seen since World War II. It is just a matter of months ( and investor patience ) that the time tested principle of INFLATION FOLLOWS MONEY will exert its force - where inflation begins increasing, causing gold values to accelerate. Needless to say gold shares with their built-in leverage ( gearing, as the Brits say ) will soar in value. These extraordinarily high monetary growth rates will soon lead to much higher inflation worldwide. And considering the highly contagious nature and persuasiveness of the CURRENT worldwide increase in money supply, it is not an exaggeration to wait for ( indeed to expect ) gold share value increases reminiscent of the late 1970s! "Gold is the most monetary of all commodities, and its price correlates over the long-term directly with the growth rate of the money supply." - "Investment Strategy & the Money Connection," by Edward J. Cousin. Uncle Miltie, do you see $500 GOLD IN 1998??