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To: Hawkmoon who wrote (29500)	3/7/1999 3:36:00 PM
From: Mark Bartlett	Read Replies (2) \| Respond to of 116764

Ron, << We (and I believe I'm safe in saying)have the only economy that continues to grow.>> Actually, the Canadian economy is doing very nicely - and it anticipated to be one of the strongest in the next few years ..... but I would not expect you to know much about that - after all, we only share the longest undefended border in the world. <<It has been in decline against the Dollar since the middle of January(8%). So much for the perceived value of gold as a backing.>> The currency is only 12 weeks old ..... I guess another way of looking at this is - how much less would it be worth if it were not backed by gold .... glass half full, half empty thingy. <<It is that growth, and the current confidence that we will continue to grow technologically and economically, that truly underlies the strength of the dollar.>> With all due respect, Ron - I think the US economy is one of the greatest charades that has ever been perpetrated on the public. Your debt levels are stratospheric and rising ... your balance of trade is pathetic and getting worse ....really and truly, the US economy is just the least stinky, among a whole bunch of piles of stinky crap. .... but that could change at the drop of a hat. One need look no further than that so-called surplus you reportedly have .... pure BS - and the sign of a truly warped system, that it would even attempt to be portrayed as such. And to top it all off - you come to this thread and suggest gold can't go up because it will be the reason for this economic hocus-pocus to come undone .... more nonsense. It will come undone because it was not built on sound economic principles in the first place. <<But on the down side, hundreds of millions of people were subjugated and provincialized in the pursuit of gold.>> I'm going to puke, Ron - and this is not happening now with currencies ... give me a break ... talk about selectivism ! <<Fiat money takes into account a nation's overall economic strength as a gauge of its currency's worth rather than some shiny metal dug from the ground.>> Remember that when the US debt comes home to roost. The fact that (according to Hutch) the US have been net buyers of gold, suggests to me that there are still those within the US financial hierarchy, that believe the yellow still has some intrinsic value. BTW - Do you honestly think the rest of the world is going to sit by and tolerate the present economic US hegemony - I can think of nothing more destabilizing to world peace than that - and history bears this out. If the booty can not be shared, the human tendency is to destroy the whole damned booty so no one can have it ... and history bears that out too. Your vision of the world is very much shaped from inside the US looking out (and that's understandable since you are American) ... try from the outside looking in, for a change (if that's possible) .. believe me, the view is truly different. I am going to go on record and tell you how all this is going to end ... those that had at the start of this bull, will have a lot more at the end .... those that thought they had at the start of this bull, are going to find they have interests payments to make on stock they own at a deficit .... that will be a real boom to the world economy. MB

To: Hawkmoon who wrote (29500)	3/7/1999 4:46:00 PM
From: PaulM	Read Replies (2) \| Respond to of 116764

1. The Euro is not 30% backed by gold. Rather, the ECB consolidated balance sheet includes exchange reserve assets, of which gold and gold receivables make up 30%. Those reserves are primarily made up dollars. Which the ECB hasn't used--yet. If the Euro were "backed" by 30% gold., it's price vis a vis gold would have been fixed, in which case it would have maintained parity against the dollar since January. 2. Your criticism of the structural problems with the European and other economies is a valid point. However, if these problems, which the Euro block has always had, mean that these countries have little choice but to devalue their currencies, then why have the D mark and swiss franc consistently outperformed the dollar since WWII? fame.org 3. The U.S. Dollar is the only currency whose exchange rate is supported by massive foreign demand (as evidenced by the trade deficit). And that, in turn, is related to the dollar's CB reserve status (which also explains why the dollar and U.S. economy strengthened in these times of crisis) . When that status changes, dollar fundamentals will manifest themselves. 4. It's true that U.S. "growth" has always been faster than that of other major industrialized nations. It's also true that this country's fiscal and monetary irresponsibility has resulted in interest rates (i.e., govt borrowing rates) usually double or triple those in Japan and Germany. A country's need to monetize its debt--the engine of inflation and devaluation--depends not only on the growth of its tax base, but also its borrowing costs. So the relevant figure is: Interest Rates minus Gowth in Tax Base = What We Will Have to Monetize Some Day.