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

To: David R. Schaller who wrote (1758)	10/3/1998 1:25:00 PM
From: Ahda	Read Replies (1) \| Respond to of 1911

Do you know where i can get the figures on that?

To: David R. Schaller who wrote (1758)	10/3/1998 4:31:00 PM
From: ahhaha	Read Replies (2) \| Respond to of 1911

You must remember that the dollar is the world's reserve currency. Like gold European central banks are not likely to let go of much of it. If the US inflates, then some of the say, $400 billion Eurodollars will be cashed in to hedge against US actions. That might be $20 billion. Before the US got too carried away, the effects of inflation would force the FED to raise interest rates and the dollar would strengthen discouraging further factoring. The movement of $20 billion in Eurodollars into alternatives like gold doesn't cause inflation, rather it's a protective reaction to inflation. The bidding up of the price of gold isn't inflationary. If there is a real economy effect, it's deflationary especially if it is the US that is inflating because we have the lion's share of the world's gold. You could also argue that once gold stabilized at a higher price, it would serve as a base to accommodate a new round of inflation, since it is a component of the monetary base. This kind of circular reasoning is absurd because the tail does not wag the dog.