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Gold/Mining/Energy : At a bottom now for gold? -- Ignore unavailable to you. Want to Upgrade?

To: Vieserre who wrote (1633)	9/16/1998 2:21:00 PM
From: Ray Hughes	Read Replies (1) \| Respond to of 1911

Viserre: In this scenario, who will have any money left with which to buy gold. If money flees currency will not governments shut down gold markets to prevent the final collapse of currencies? Don't bet that governments won't go to extreme measures to protect themselves. RH

To: Vieserre who wrote (1633)	9/16/1998 6:54:00 PM
From: robnhood	Respond to of 1911

<<<<There is an interesting counter-argument that the unification of regional economies and the formal or informal linking of currencies - the European Union and the European currency unit, for instance, assuming they eventuate - will shrink the diversity of potential safe havens to the US dollar and the ECU and therefore drag gold back into the limelight as the obvious alternative. ("Reserve gold sale strikes sensitive local nerve," The Age, 05 July >>> 1997)https://www.siliconinvestor.com/readmsg.aspx?msgid=5737113

To: Vieserre who wrote (1633)	9/17/1998 12:55:00 AM
From: ahhaha	Respond to of 1911

Takada's argument is based on the power of debt. He believes that once you owe, the loaner owns your soul. This is part of a Victorian economic concept that all debts are paid. Perhaps it is a secular extension of the doctrine of karma. In any case many debts are never paid and there is no consequence for failure to pay as just about anyone knows. That's true on the international level too. There, debt can always be paid because every country has something of value to the international community. When debts become large relative to ability to down pay, the basis upon which the debt was made is constrained. No further extensions will be made under the previous basis. Once the basis is reduced by trade, the extensions can be reviewed. Debts rise until interest rates rise to cool them or they rise until trading partners doubt your ability to pay and slow extensions to a rate less than the worth of trade. Then they fall. They fall until incomes are strong relative to existing debt or relative to the propensity to add new debt. It is a self-correcting mechanism like ALL economic phenomena are. Free markets are the unavoidable default state of existence. Governments and others can only interfere with the free market mechanism inhibiting its ability to accurately allocate resources. When there is interference, the market cooks a scheme to bust out of the confinement. If the powers that be try to supersede that process, the market will destroy the powers. See the Soviet Union. Debt is hostage to the forces of the free market and thus can go only so far before countervailing forces come to bear. To extrapolate an application of force into a end of the world scenario is a little excess and to claim that Japan's problems are focused in debt simply misses the boat. Japan's problem is that they insist in believing that they can wear the emperor's new clothes. They have spent decades revelling in the fact that they have defeated America at her own game. America quit capitalism long ago so it is hard to see their argument. Japan has taken free market capitalism to a higher level by letting it work. This went against the collected wisdom of the world's university economic elite who know that socialism is the only true way to fairness. But Japan forgot or never knew that capitalism has a dark side. It isn't so dark as it is necessary. The necessity lies in killing off the inefficient. Wealth breeds inefficiency, indolence, and the envy of your neighbors. What Japan got out of unfettered free market capitalism was the center of the world's wealth. It made them fat and uncompetitive. Not relative to America but relative to competition fostered by their own successful efforts, the competition of the Asian Tigers. They are doing to Japan what Japan did to us. That isn't a problem for Japan of the '80s. It is a problem for Japan that has lost the competitive edge, but it is a problem only so far as the leaders, the people, refuse to accept a new role in world economic affairs. The new role is to utilize their superiorly educated population and work smarter, not longer for coolee wages. To persist with what brought success in the past means to deny the debt/banking situation that has arisen due to the things mentioned above. Takada thinks these are intrinsic elements when they are actually only symptoms of inevitable Scumpeterian evolution. The debt problem would evaporate overnight if the Japanese accepted this changed role. Takada has a point if the denial persists. If you have a cancer, you had better get it addressed or it will pull you down. Japan has bought some time with money pumping. It will be to no avail unless they repair the structure of their economic destiny. That's why it's prudent to carry gold. When people try to get something for nothing by raising their wages unsupported by their productivity, gold rises. Gold doesn't rise if central banks don't support the will to inflate. However, there is almost no period in history where such good judgement is put in place. When push comes to shove the central bank will cave in and supply money because it buys time. This mechanism is the only threat to world prosperity, not debt, because this mechanism is only corrected when the free market adopts draconian measures to undo the commitment of central banks to protect the people. It is in that environment that you have major banks going bust and you see all the debt liquidation carnage suggested by Takada. Since when is falling prices bad news? For whom is it bad news? And when and where do falling prices bring about falling wages? Not on this planet. We have printing presses.