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

To: banco$ who wrote (22745)	11/9/1998 4:11:00 AM
From: Alex	Respond to of 116759

Gold's Behavior Predictable Editorial by Robert Hoye, Northern Miner - August 10-16, 1998 There have been six great financial booms in modern history, and the value of gold has declined through each one. However, the latest bear market has prompted a number of explanations. While it's a little early to conclude that the global bull market is over (a number of lesser stock markets either crashed or are experiencing a bear market), characteristics that have supported the boom seem to be changing. Typically, once these booms end, real gold prices increase under circumstances designed to confound your average goldbug. Very good times for gold have occurred with the serious deflation, both of financial and tangible assets, that results from a great bull market. Weakening labor and energy costs enhanced mining profitability such that gold shares substantially outperformed the broad market. One of the most formidable events in starting a credit contraction has been the sudden forced liquidation of insupportable speculative positions in lesser stock and bond markets, as well as in currencies and many commodities. Recently, six out of the seven indicators integral to a financial boom turned negative, providing a warning. Thanks to the details available from the last two booms, in 1929 and 1873, there are some developments evident within the key year that anticipated previous reversals in gold to a long recovery. As the real price of gold has been conforming to its pattern through a financial bubble, far too much attention has been paid to the supposed influence of central bankers. Gold would have declined with or without selling by the central banks. As with previous new financial eras, it has been easy to describe borrowing short and lending long as "liquidity". In all previous cases, this was employed to speculative exhaustion, and severe deflation in both financial and tangible assets followed. Within these conditions, credit gained in complacency collapsed in suspicion (such as happened in Asia), and prudent investors turned to the real liquidity and value inherent in gold.