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

To: Mark Bartlett who wrote (26628)	1/21/1999 10:45:00 AM
From: Hawkmoon	Read Replies (3) \| Respond to of 116767

it is its misuse. There is no way the practice of "leasing" gold should have ever been allowed Mark, I certainly concur that leasing of gold by CB's to the extent that has alledgedly occurred was dangerous and reckless. However, there are examples where property owners lease the rights to drill for oil on their property, whether those rights are exploited or not. What purpose do CB holdings of gold serve?? They take up storage space. They accrue no interest. And the metal competes in the psychological minds of those looking for storehouses of value for their money. You certainly can't demand payment in gold for your paper currency any longer as demand notes no longer exist. And if the CB's sell their holdings of gold into the open market, it would utterly destroy the metal's market value. So the banks maintain a close hold on gold in order to control its price, both for your interests as gold holders, and as a means of preventing the metal from undercutting confidence in the paper denominated currency they issue. It's about investor psychology. They realize there is a long-standing belief in gold as a storehouse of value and safety. In fact, many of the French CB's are goldbugs as well. But they certainly wouldn't mind seeing gold demonetized gradually as well. I would rather see a happy balance where neither side attempts to destabilize the other. Now we see goldbugs trying to line the troops in an attempt to give back some of the beating they have taken over the past several year. That makes sense, and the CB's likely realize that there has been excess speculation against gold. But there is a difference between "rubbing their noses" in the truth, and beating it into them in an all-out, highly disruptive brawl where both parties may suffer. The CB's have the gold and the ability to sell it into the open market. Force their hand and they just may do that and then the public buyers will be left holding the bag trying to find someone to buy out their positions from them. Regards, Ron