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

To: Stephen O who wrote (19427)	9/21/1998 11:57:00 AM
From: butkus	Respond to of 116759

Most of the world stock markets are falling. There are too many goods chasing too few buyers. Corp. profits are falling. Banks loaned money when it was easy for corps to get money. Money is getting harder for corps to get and thus it is more difficult for them to pay back mentioned loans. Banks complicate their problems by "protecting" themselves using highly leveraged options. Highly leveraged options are like highly leveraged houses. Money becomes harder to obtain-market for house shrinks-house value drops but, the financial obligations remain. Some believe you can fix these problems by making it easier to borrow more money (lower interest rates). When this easy money is able to cause the price of goods to go up so will gold. Remember, however, we are producing too many goods.

To: Stephen O who wrote (19427)	9/21/1998 12:17:00 PM
From: X Y Zebra	Read Replies (1) \| Respond to of 116759

In the 1930s interest rates went down and stocks went down I stand corrected..... Depression... Deflation. Therefore, are we now going the same path of the 1930's ? Personally, I do not think so, two very different worlds (imo). Does the argument for deflation take into account the rate of growth in nearly every country's population in the world, hence creating demand for more and more goods and services ? if yes, that implies continued lower standards of living for most populations, (and incrementally so). I do not see this. Better communications. Better information sources available to masses. Bottom line, it will be earnings that will determine if equity markets will go higher or not. For that, they need to sell to growing markets.... Psychological reactions to events such as the Clinton Crisis, while important, they will be more of a short term nature. If the argument for deflation succeeds, leading to lower prices, that would mean lower prices for commodities, hence lower price for gold. Why would we assume that gold would go higher, on a long term basis under such scenario ? Psychological "safety" ? I do not see such event taking place. On a short term, speculative basis, it is possible, but on a longer term, I do not see it happening. Time will tell.