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

To: Investor-ex! who wrote (18660)	9/13/1998 1:55:00 PM
From: banco$	Respond to of 116892

Funny stuff ex!, that was enjoyed with this morning's coffee. Separately, let's see if Mr. Hoye is about to have his day, or three years as it were, in the sun. "History suggests central banks will soon start to hoard gold" Sir, Robert Chote's conclusion ("The golden hoard", January 21) of there being little likelihood of a large selling spree of gold by central banks is reasonable. Although some countries are aware that rising gold prices would impede their ambitious issue of currency and debt, street opinion that some central banks have forced gold down should be placed in perspective. Including this bull market, there have been six great inflations in financial assets since the South Sea Bubble of 1720. Other than ending with a speculative frenzy, the most reliable features have been declining real long interest rates and declining real or deflated gold prices. Given the powerful action in securities markets, gold would likely have declined without central bank selling. In each case, once securities speculation was over, real prices of gold rallied for three years. Human nature of central bankers suggests that, with rising prices, their "selling spree" could become a hoarding spree. (editorial, W. Robert Hoye, Quantum Research, 1/27/97 FT) I would like to add that although central banks have the ability to throttle the POG, the public makes the ultimate decision. Those central banks that were among sellers in the 1990's often responded to the public's strong preference for equities. They dishoarded an asset declining in value, gold. It's important to note that largest holders of gold reserves did not sell, and not all CB's were sellers, some actually added according to financial advisors. Much of the selling was done by smaller holders and by virtue of necessity. EMU member states had to sell gold bullion to balance their books and achieve entry requirements. Certain governments and their indigenous populations also sold gold out of necessity due to crushing economic conditions, therefore, gold fulfilled its role. A fundamental change in the assessment of equity markets may be taking place. Public perception that it doesn't much matter what mutual fund is selected makes the portfolio equation a completely new matter. The large metropolitan U.S. press still somehow manages to avoid reporting on the recent rise in gold, right in the midst of dramatic downturns in equity markets. Gold articles that do appear generally quote negative financial analysts. Richard is probably correct in suggesting these 'anyalysts' firms are likely short gold, a question the press appears to avoid while obtaining comments -- his proactive stance with business editors is admirable. Do you recall the other year when trendy techy issues suffered a substantial sector decline? It turned out that among the largest of U.S. mutual fund institutions was found to have dumped said issues, while its front line brokers/analysts pedalled the stocks to unsuspecting clients. Apparently neither the press or financial institutions can be fully trusted with respect to objectivity or alleged 'free markets.'