Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: marcos who wrote (22787)	11/9/1998 10:21:00 PM
From: Zardoz	Read Replies (2) \| Respond to of 116779

Come on Macros, you know the answer here. It's not the amount of GOLD that a country has that determines it's own currency net worth. It's the tax base, monetary policy, fiscal policies. If you believe that GOLD makes for a stronger currency than here is your problem: A stronger currency would mean that Canada's currency would be say at $0.80 US/CDN. This would mean that 89.7 Yen/CDN, and western Canada would not be in a recession, but a full fledge depression. A depression that would be longer, and more deep, as in the past. Resource countries that export 90% of all products made can not afford to have strong currencies. And therfore in times of commodity deflation they suffer. But when other countries seem to start to inflate growth {such as Japan} than Commodity countries shine. And whom does Canada export to? 35% to Japan, and 65% to USA. This is what the USA government was afraid was going to happen when the YEN hit 145 to the US dollar. It was a fear that Japan was trying to devalue their currency to increase exports and growth. "Export your way to growth." Of interest are the Earnings on Investments of +128, which is the monthly payments recieved from US bonds. So in defacto Canada has a gold based currency price in an asset that is Gold back. In fact GOLD is a negative to countries that are using a floating currency mechanism. Look at the past history of Switzerland, and for that matter other countries that have excess gold. In times of recession the unemployment spikes. If a currency devaluation is neccessary to aid in support of a stronger employment base than that is what must occur. If the average person is concerned about devaluation, than he should own GOLD, and NOT gold equities, or a basket of world currencies. This is WHY Canada got rid of their Gold. As well as other countries. Consider why currency pegs are so hard to hold....