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

To: Ahda who wrote (1757)	10/3/1998 1:13:00 PM
From: David R. Schaller	Read Replies (2) \| Respond to of 1911

Darleen, I understand there are more euro-dollars in circulation in Europe than there are dollars in circulation in the US. Who knows what happens if these come back to US to roost? Can't help but think the effect would be very inflationary. Dave

To: Ahda who wrote (1757)	10/3/1998 2:27:00 PM
From: ahhaha	Read Replies (1) \| Respond to of 1911

The IMF is irrelevant. They do all the wrong things, have little power, and are considered a randomizing factor, but they aren't a wild card. When nations choose bad economic actions, the IMF is there to support them with OPM. The world is on the gold standard. Currencies aren't fixed to gold. That decrepit system died long ago. When you fix a price to anything, you sew the seeds of future disaster. The free market in gold enforces worldwide monetary discipline. The enforcement takes form through the changing price of gold. The SDR was another disaster. It's a hybrid form of fixing prices of currencies. It's based on the accuracy of computed adjustments of component currencies. Computed implies a computer. Only free markets are accurate in properly assessing the value of a currency because the assessment is always in flux. That's the nature of things, so it makes sense to have a device that mimics nature. A computer comes up with a fixed answer. That isn't in the interest of anyone. Having too many dollars around is equivalent to thinking that there is too much wealth around. The dollar is the world's reserve currency. Abuse its value by creating too many and the price of gold rises. Fix the price of the dollar to gold, create too many dollars, and see your gold supply disappear. Regardless of what some benevolent revisionist bleeding heart central banks like the Swiss have recently practiced, the free market in gold is preferred and no nation regardless of their political and economic philosophy thinks gold isn't the true determinant of value. The Swiss have suddenly reaffirmed this view when they realized it was they who were bleeding. It has been expressed that the FED has created extra dollars to ease tension, FED was creating before trauma. It has been suggested that FED was creating dollars to bail out foreign economies, since they've known for 20 years that extra dollars go to the low cost producers. During the virtuous cycle this was constructive since the dollars took pressure off our domestic markets for government debt. Now, at the advent of the vicious cycle, we have the same mechanism provoking a destructive outcome. When FED pumps the dollars don't go into stimulating foreign production, they are factored through the international banks back into the US without real economic effect. The only effect is an explosion of US money supply. The proof is seen in a rising demand for treasuries and a falling dollar. The real economy result is that extra dollars will go into price increases disproportionately, not into production proportionately. Perpend.