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

To: Stephen O who wrote (1635)	9/16/1998 9:24:00 PM
From: Ray Hughes	Read Replies (5) \| Respond to of 1911

Stephen: To revalue gold is to put it into play. That sends a message that currency has been devalued and that gold is a preferable holding. Governments can't afford to scuttle currencies. That would crack the facade, with dire consequences, that paper assets are intact. Japan would utterly collapse as the banks and insurance companies crash. The rest of Asia would struggle, along with Russia, to feed people. The Balkans are already inflamed - famine, collapse of society and war could rapidly spread in east Europe. Ideologies are already at each others' throats in Africa and largely it is only the US and Russia, keeping their interests and clients in tow, that prevent the spread of conflict there. The world is caught by its own tail (the debt bubble's implosion) and its too late for anything but massive reflation (Clinton's scheme). However, money markets now are free, and will not permit the resultant inflation to take hold. Interest rates would soar - returns would remain positive or the money market would be denied access to wealth. Catcha 22 Statistics shows that gold rises only in response to periods of negative real returns on quality bonds. If money markets will not permit a return to negative real rates, gold will not rally except in the event of upheaval in world order. The latter is very possible. We are likely facing a massive failure of international currencies that could, ultimately, propel gold higher as those who remain holding some assets finally throw logic to the wind and seek self preservation in gold. Will governments allow this to happen? No - I believe that drastic world conditions would provide the excuse to close down gold trading to protect currencies. Only the wealthy will prosper in the coming melt-down, probably not by holding gold but by keeping cash where it will remain accessible and later scavenging the then-collapsed markets for real assets. Personally, I'm beginning to worry about holding cash assets in accounts at major brokerages. Here in Canada one (of many failures) brokerage failed and months later account holders can't get access to their own cash. The cash is gone, co-mingled with general funds, and the Canadian government is not eager to promptly pay out under brokerage protection schemes. Catcha 22. RH