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To: Don Earl who wrote (22110)	5/19/1998 10:17:00 AM
From: dwight vickers	Respond to of 42771

Don, As memory serves gold has a mixed record in bear markets, and the metal can even act differently from the mining companies themselves. I believe it responds to other stimuli. With stocks this high, and metals this low, it could simply become a "safe haven" for troubled times. When enough currencies wind up getting hammered? Contrary to popular belief it has been more of a hedge against "deflation", and not "inflation". Since I'm a believer that the threats are all on the deflation side, and we've been in an 18 year bear market, I'm very comfortable building a position in gold and silver. Dwight

To: Don Earl who wrote (22110)	5/19/1998 10:56:00 AM
From: Paul Fiondella	Read Replies (3) \| Respond to of 42771

"their mutual funds have probably done well this quarter" <ggg> Let's see, if they took the 1 Billion and invested it in DELL at the beginning of the quarter..... ============================= (Off TOPIC) The idea of using gold as a hedge for me is basically a bet that the consequence of the deflation in Asia will be an attack upon all paper currencies in rotation. In Asia you have competitive devaluations going on and we are waiting for China to join the game and start a new round of devaluations. The Yen, the strongest Asian currency, is depreciating against the $$$ bigtime. Now Gold is linked to the $$$. At some point the $$$ comes under the same pressure as the YEN perhaps because of the Balance of Payments deficit going out of sight. Thus the hedge. On a secondary level you also have the reserve currency picture (the European EURO strategy)and the flight to quality in any crisis. The US can only float enormous amounts of $$$ denominated debt to pay its bills because other countries view the $$$ as a reserve currency. Treasuries are more valuable than gold --- they pay interest! If there is a correction in the US market however money will flee out of the US and confidence in the US economy and $$$ will suffer. Some people having no trust in any currency at that point will buy gold. Unlike Greenspan who believes that so long as people have a job they can spend 96% of their income and leverage their purchasing power by taking on debt, I believe there will be a day when those jobs disappear again. THe debt will still be there. In fact our entire economy floats upon enormous purchasing power leveraged by enormous debt. In the end the $$$ will pay the price. At least that is my reasoning. Keep in mind that Gold prices are relatively low and thus you are getting in near the bottom. If there are any flaws in this reasoning, I would appreciate being corrected.