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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: long-gone who wrote (3599)	2/20/1999 11:32:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 81802

Will this be one of those wars where the real losers are those that are "innocent bystanders"? Well, let's game play this out a bit, Richard. Let's say that gold advances 25% against the dollar putting the POG @ approx $340/ounce. What would be the repercussions? Sure the US dollar would decline relative to gold, but what would happen to foreign currencies? The Euro might rise due to its 30% backing by gold, but that would not alter their economic weakness. Does the Euro deserve the place as major global reserve currency based upon its economic fundamentals?? Would gold improve the unemployment or socialist economic policies they follow?? How about Latin America and Asia? With a weaker dollar, would Japan's currency continue to strengthen as even more dollar denominated Japanese assets are sold and repatriated to Japan? Who will the Japanese sell their products to then?? How high will unemployment go there (already some 10% of Japanese workers are functionally, though not officially, unemployed)?? Who will the Brazilians sell to??? Even if their currency devalues further, who will have the credit-worthiness to purchase their products?? Having the POG rise will certainly cause some damage to the US currency. But it would certainly make our goods less expensive relative to the Yen and Euro, should those currencies rise. And that would be the effective equivalent to trade protectionism, wouldn't it?? But it wouldn't be that nice or neat, because no one knows who is positioned where financially. Whaddya think?? Regards, Ron