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.

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

To: Bobby Yellin who wrote (10613)	4/25/1998 1:16:00 PM
From: bobby beara	Read Replies (1) \| Respond to of 116790

Bobby Y., if my thesis is right we are ending the equity bull and beginning the hard asset bull. However from the looks of the charts I don't think this transition will be your normal ease on in. To end an 18 year hard asset bear (gold) and a 16 year equity bull simultaneously has got to set the bombs bursting in air. 87 was just a trial run, IMHO - bwdik bobby b. Wisdom for the day: Make plans by seeking advice; if you wage war, obtain guidance. Proverbs 18. Guess that's why were here seeking advice before we war with the markets. Nice to be among so many wiseakers -g-

To: Bobby Yellin who wrote (10613)	4/25/1998 4:03:00 PM
From: John Mansfield	Read Replies (1) \| Respond to of 116790

'remonitarization of gold and silver.' Interesting discussion of consequences on possible bank run. John ___________ 'Y2K Radio Rap With Special Guest: Andrew Gause By Ed Meagher Background- Last week Tony and I had Andrew Gause, a monetary historian and author of the book, The Secret World of Money, on the show. Interview- We can always tell when we have struck a nerve, made a mistake, or have a particularly interesting guest on by virtue of the fact that all 12 call in phone lines light up at once. Known as the Christmas Tree effect, this is usually occasioned by some bonehead comment on my part or a particularly pithy comment from a guest. Andrew achieved this effect with his history of money explanation and his provocative assertion that based on the Constitution money is nothing more than a unit of measure like a quart of oil that measures a specific quantity of gold and silver. His response to Tony's challenge to define money as it actually exists today included the observation that 200 economists had tried in 1971 and were unable to do it. Actually he observed it is easier to say what it is not. It is not the bills or coins we carry around with us. These "notes" represent the digital 0's and 1's that exist in the computers of the Federal Reserve Banks and are assigned a value by "fiat" based more or less on supply and demand. This fiat money system is dependent on the ability to move these digital dollars around reliably and most importantly on the trust we place in this system. Tony asked what form a "run" on the money system might take and Andrew responded that depending on its severity it might take the form of a remonitarization of gold and silver. This could take the form of 1930's era bank closure and law requiring anyone holding gold or silver bullion to turn it in for gold or silver certificates. Tony then asked Andrew to explain the intent and the effect of the 1971 law closing the "gold window" or the exemption allowing non-U.S. citizens to convert "greenbacks" to gold. Andrew explained that by 1971 foreigners (notably the French) had "looted" the U.S. Treasury of most of its gold and that President Nixon had no choice but to separate our paper notes from any relationship whatsoever to the underlying commodity value of gold and silver. One of the most notable features of this 1971 law was that the Treasury no longer had to even disclose how much paper money was printed in relation to how much gold existed in the vaults of Fort Knox. Andrew's ability to explain some very complex concepts by using some down to earth analogies made him a delight to interview. One of his "It's sort of like_" involved the notion that our current monetary system is like a restaurant that when you come to lunch they hold your coat and give you a claim check. While you are eating lunch, the restaurant loans your coat out to someone else. This works fine as long as another coat becomes available to be loaned out before you finish lunch and demand your coat back. What if no more coats are available? Andrew humorously belabored the analogy even further, likening the manipulation of interest rates to the extension of one's lunch break or changing the weather to avoid having to deliver the coat to more than one person. On a more serious note he recounted the experience of the 1977 to 1980 period in the U.S. when holders of Treasury Bonds lost 70% of their principal while people who owned gold saw their assets grow by a factor of 10 from $103 to $850 per ounce. Next Week: The rest of our interview with Andrew Gause. Come back then because Andrew saved some of his best comments for last. A tape of this interview with Andrew Gause is available through The Y2K Investor Web site, or by calling (301) 924 6643. A copy of Andrew Gause's book, The Secret World of Money can be obtained by calling (201) 423-2200 Read Ed Meagher's bio. y2ktimebomb.com