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Gold/Mining/Energy : Cross Lake Minerals CRN -- Ignore unavailable to you. Want to Upgrade?

To: Taco who wrote (1036)	1/1/1998 6:14:00 PM
From: The Fix	Respond to of 3650

Hello Taco......This is a quick overview in a nutshell about deflation and POG. I'm not a good teacher or explainer of things so I'll use examples. In deflation the price of goods declines. Which in turn make a company less profitable. Which in turn corrects the markets. Currencies get devalued and Gold (Along with Metals) are back in Vogue. It's a Dommino effect. Example: Lets say that an American Co. (XYZ Co.), Six months ago did bus. in the Asian region. Things were very profitable. Now that deflation and some of the currencies have devalued themselves. That means that the customer can only pay less. XYZ will still do bus. in the region but at less margin/profit. This effects the bottom line and earnings come in less than expected. Trade imbalance happens. The Market in this sector goes down. The real kicker for Gold and Metals is the fact that currencies have devalued themselves against the U.S. $$$$$. These countries that have devalued themselves will start selling off there only real asset that they might have left which will be the U.S. Dollar. Because now the Koreans for example can sell VCR's for more profit (trade imbalance) to us. Soon the entire region (Asia) is selling off the U.S. $$$$ and the Dollar goes down. The Fed comes in to support the U.S. $$$$ (Buyin). All currencies around the world are tied into The Gold Standard. The Fed will need to start buyin up Gold and Gold contracts. Along with Gold....Silver, Copper etc. rise as well. Hope this helps you somewhat.......Fixer