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

To: Zardoz who wrote (28291)	2/15/1999 11:54:00 AM
From: Stephen O	Respond to of 116874

PRECIOUS METALS ARE FIRMER in what little metals trading exists given the holidays that prevail around the world. The platinum/gold spread has widened quite markedly, while the Silver/Gold ratio has fallen quite sharply. Both "movements" are indicative of a bull market in the metals, and perhaps most importantly of all, gold is testing (and very nearly breaking) the downtrend line that has dominated the market for several months. We have called our clients' collective attention to that trend line for the past two weeks, and we call it to that collective attention again this morning. We find it more than passingly interesting that this trend line is under assault even as the CRB has continued to move to new multi-decade lows. In light of the material weakness in the G-7 bond markets of the past two weeks, we make the simple statement that something material is changing in the capital markets.... that a "flex point" has either been passed or is now in the process of passing that shall prove very material over the course of the next several months.... or years, and that we shall very probably look back upon the 4th quarter of 1998 and the 1st quarter of 1999 in retrospect as a time in which the tectonic plates of the world capital markets shifted: 02/15 02/12 Gold 289.30 287.25 + 2.05 Silver 5.65 5.57 + .08 Palladium 354.00 353.00 + 1.00 Platinum 368.00 361.40 + 6.60 Gld/Slvr Ratio 51.20 51.57 - .37 Gartman Letter 15 Feb 99

To: Zardoz who wrote (28291)	2/15/1999 12:27:00 PM
From: Hawkmoon	Respond to of 116874

And reguardless of how much gold is backing a currency, that backing does not aid in the support of the currency, and only acts as a hedge that can be sold to changed fiscal policy, and jolt the markets into lesser trends. A free floating currency aids economies, as a pegged currency show Agreed, (as I have to agree with many of your other points.) I'm just an "sh*thouse economist" (readily admitted) but I've come to the same conclusion about the gold the CBs have hoarded. It hasn't been because they find it particularly valuable, but because it is a mechanism that permits them to stabilize their Fiat system from any encroachment back to the belief of a gold standard. Rightly or wrongly, I believe they are taking the appropriate stance. But should the CBs efforts fail sometime in the future and we're forced back onto a gold standard by a market psychology that has lost confidence in the Fiat money system, I would find myself in the gold camp as well. The seemingly obvious fact is that you can't switch between one monetary illusion and another without drastic impacts on the global economy, whether it be from gold to Fiat, or the reverse. Your points on various hedging instruments are also well taken. I have been weighing investing in a "bear fund" as a hedge against a market crash. Gold and/or gold stocks are also something I'm considering as hedges (thus my reason for being here). The tough question is how are various markets strategies altered by a deflationary spiral? Inflation most of us can understand. Deflation just seems to be a bit tougher since some currencies are devalued(inflated?), while others are made even stronger as liquidity contracts. When I first started becoming interested in gold because of my research on potential problems with Y2K, I was almost positive in my ignorance that gold was set to take off. But after thinking it through a bit more, I'm no longer so sure about that, and am trying to examine other influences, most especially CBs policy on gold. Appreciated the detailed answer. Its seems apparent that you're opinions are about as popular as mine are here on the thread.... <VBG> Regards, Ron