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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (1049)	3/26/1999 2:46:00 PM
From: ahhaha	Read Replies (2) \| Respond to of 3558

You have the 'Bug view. The central banks can't even keep the money in a box. You didn't understand what I was talking about. My knowledge about gold is thorough. None better is available on the planet. What my knowledge exposed in the previous post is that there isn't necessarily a causal connection between other commodities and gold price. In different eras gold rises from fear or from purely monetary reasons disconnected from economy, from attempts at cornering the market, from war. There are many others. What occurred in 1980 wasn't due to excess money creation. The FED had lost control and the free market during much of '79 was raising interests rates in the same way rates rose last year without the FED condoning the move. When people become fearful they won't lend their money but at an ever increasing rate of interest. This has the effect in our demand oriented economy to cause real money supply to fall. So while gold was screaming upward real money supply for a long time had been falling. It was fear of future inflation that caused gold's parabolic move, not the reality of the fundamentals under the existing inflation. Indeed, the effect of the high interest rates was guaranteed to induce deflation and the comprehension of that at that time humored me no end, because the pros I knew thought I didn't have a clue. I made a bundle going short gold stocks in March 1980. Gold price movement therefore was discounting not the future, but the past. This is a common occurrence in markets though mostly seen in the stock market. It takes the finest understanding of the market to discern when a market is discounting the past and when it is accounting for a possible future. Perhaps it could be argued that the gold move in '80 was due to an expectation that after the high interest rates busted the economy that the FED would have to really open the money floodgates. That's the second order consideration whose amplitude is lower than that of random noise. You can't expect to know the degree of "discount" beyond the next recount.