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To: Lucretius who wrote (4045)	10/10/1998 2:36:00 PM
From: 007	Read Replies (1) \| Respond to of 14427

Anybody think that the dollar's fall and gold's fall are linked in a logical manner? It goes like this: Yen goes up on the dollar, hedge funds are squeezed to buy Yen to pay back yen-carry loans, they dump other assets like treasuries to raise funds to buy yen, but if they're stuck in positions they can't unwind just yet then maybe they borrow more gold and sell it to raise the funds for the yen. Banks that are desperate to avert catastrophic losses that would be result from forced hedge-fund-unwinding may be loaning more gold so the funds can rotate their debt out of the yen-carry and further into the gold-carry. Perhaps they're even loaning treasuries and creating a treasury-carry. Just speculation.... OO7

To: Lucretius who wrote (4045)	10/10/1998 5:24:00 PM
From: Alias Shrugged	Read Replies (1) \| Respond to of 14427

Beebs - I read that Princeton piece. Pretty wild. Could be that in a panicked rush to liquidity gold is also sold. Massive selling by Central Banks would be quite ugly. But let me throw out a thought and maybe all of us could bat it around. Let's say the financial superstructure sitting atop the real economy implodes. The next day, somebody in Japan wants to buy gasoline for the family Toyota. So the Japanese oil Company goes to the Saudis to buy crude. The Saudis have seen virtually every currency, include the mighty USD, careen violently about, mostly in a down direction. Sensing massive reflation is only a moment away, the Saudis quote the price and demand payment in gold. I think I might buy just a few more gold stock puts. Then, a violent correction in gold stocks allows me to buy calls like a madman. Mike