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

To: Investor-ex! who wrote (26666)	1/21/1999 4:46:00 PM
From: Mark Bartlett	Read Replies (1) \| Respond to of 116768

Investor-ee, <<IMO, it is in the absence of a sensible, stable, consistent, fair, long term monetary system, that the wishes of the vast majority will not be granted.>> An excellent post. Expresses my sentiments perfectly. Painting gold as the whipping person of our present economic state of affairs is ridiculous. Gold, in many respects, is the only hope many people have in this world. Gold, during the downturn in Asia served its purpose well. Would have even been better for those countries had the greedy shorters not used it as an excuse to short more, using the "more gold sales to the market" mantra ... and creating an even worse situation. Now many of these morons appear to be caught in a precarious situation ... and we are suppose to be accommodating of their situation, because of the economic consequences of an increasing gold price. As I said before, gold should never have been permitted to be leased. It was completely irresponsible and ill-conceived. Frankly, I never want to see any currency in this world as the world's reserve currency .... all currencies should be pegged to one thing ... gold. MB

To: Investor-ex! who wrote (26666)	1/21/1999 5:03:00 PM
From: Hawkmoon	Read Replies (3) \| Respond to of 116768

Investor-ex, Very interesting points you make. I can't say as I necessarily agree with them and I'll try to detail why as you so ably attempted with my post. First, I was reviewing those pages detailed in William Greider's "Secrets of the Temple". I would suggest those who have a copy review the following pages for information that details how "unstable" a gold-backed economy can be: Pgs. 227-235 (evolution of money) Pgs. 248-249, 261-265 (periods of deflation/inflation under a gold standard and competition between gold and silver) Pg. 337 (going off the gold standard) In fact, I would recommend reading the whole gol' darn thing.. all 717 pages of it. I plan on re-reading it again in the coming weeks. It is a must read for anyone who wants to understanding the triumphs and failings of the history of money and the Federal Reserve system. It may strip many of the myths away, many of which you already realize, but it does the same for any belief in gold or silver as an alternative to Fiat money. (At least it did for me). Now to your major points: Again, ALL reserves do not have to be backed If all reserve notes in circulation do not require backing by precious metals, then what is the point of holding gold at all?? The rigid montarists used to require that paper be issued as a demand note, exchangable at any bank for gold upon demand. If there isn't enough gold to permit this, then the point is moot. owth was awful in the 70's, especially after abandoning the gold standard. In the 70's, Growth was terrible after the depression of '29 when the US was on the gold standard (which we went off of in 1933 until 1944). Growth in Europe suffered a hundred years of wild inflation after the Spanish conquest of America flooded markets with cheap silver and gold. So where was the discipline at that time?? Wartime inevitably creates HIGHLY inflationary problems under a gold standard as the gov't waging it is forced to issue Fiat money to pay for the armaments required. (See history of Lincoln's issuing of "greenbacks" during the Civil War that were not backed by gold, in Greider's book Pg. 246) Growth is a nation's increase in net productive contribution to the planet. And thus should be the primary consideration in valuing the worth of its currency instead of some shiny metal. Thanks for making my point.... <VBG> .. a return to at least partial gold convertibility would very likely prevent the financial collapse you envision, Not likely. If gold gains credit as a perception of value, it will do so to the expense of each gov't ability to maintain credibility in its currency. That's why gold is valuable in inflationary times since it is "perceived" that Fiat currency is worth"less". But we're in disinflationary/deflationary times where despite the Federal Reserves relentless pumping out of liquidity (printing money), prices are still falling worldwide for basic commodities (at least in dollar terms). Forcing a perception that inflation in the reserve currencies is taking hold through an upsurge in the price of gold will damage the Fed's and ECB's ability to reconstitute confidence and restore the willingness of investors to assume credit risk in loans. (It may be too late, that I admit... but why hurry it on and cause even more disruption?) I don't like what I am seeing right now. The workers of entire countries thrown into poverty. People's hard-earned life savings cut in half overnight. A nation's populace saddled with piles of fiat debt for generations. Unneeded capacity built with borrowed money only to be endlessly serviced by exorbitant interest rates. No disagreement from me. Japan's banking system lacked transparency and solid regulatory practices (even worse than ours.. :0), and they are paying the price for it. But there were some economies that were doing fairly well and maintained a semblance of financial integrity and now they are suffering as well from the plight of their irresponsible neighbors. These excesses that were created will have to be wrung out of the system through bankruptcies and institutional write offs of the bad debts. Gold would do nothing to instill integrity in the financial system. It would only exacerbate the problem at this time. I understand that we disagree. But I also find manipulation of gold to such extent irresponsible acts by bankers. After all we should all be permitted to create our own valuations on property/commodities, whether they be Van Goghs, antique Ferraris, or gold. But to try to claim that gold is a better unit of exchange for the services and goods that it represents (as a proxy for barter), is fallacious. As I've stated before, it's heavy and difficult to carry around or divide into small change. And again, unless you have the ability to exchange gold on demand for reserve notes, all you're doing is exchanging one scheme of "smoke and mirrors" for another. Regards, Ron