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

To: long-gone who wrote (30794)	3/29/1999 1:24:00 AM
From: Investor-ex!	Respond to of 116791

The wage base on Social Security withholding is up more than 6.1% this year, or about triple the "official" rate of inflation, rising from $68,400 to $72,600. The standard mileage deduction decreases from $0.325/mi to $0.310/mi on 4/1/99, or 4.8%. So, instead of this deduction increasing to at least match the "official" rate of inflation, the increased "cost" to the employer is the sum of 4.8% (the reduction on 4/1) plus 2.0% ("official" inflation last year), or 6.8%. The underhandedness of these "revenue enhancements" aside, either the feds are in serious need of additional revenue, or the inflation rate is actually much higher than the official numbers, or both.

To: long-gone who wrote (30794)	3/29/1999 2:28:00 AM
From: Richard L. Williams	Read Replies (6) \| Respond to of 116791

From _The Market Cap_: >>The Market Critic: Don't call me a goldbug! We need to take a look at the gold market. My Take: Gold is a relic. I bring this subject up because we just started bombing the Serbs. June COMEX Gold futures are near $283. "War, what is it good for?" Not gold prices, apparently. I went back and looked at daily open price data on the April 1991 COMEX Gold contract. Operation Desert Storm began on January 16, 1991. The futures opened at $409/oz. 24 days later Desert Storm was over, and the contract closed at $366.10. By my math, that's a $42.90/oz decline in gold prices during war in the Middle East. Don't let the idea that the gold futures discounted the "uncertainty" of a conflict before it began, either. Coming into the Gulf War, a high of $421.50 that was put in on 9/28/90 had not been seriously tested, and in fact would stand until contract expiration. Depending on what you want to point to as a "bottom," the futures ran up from about $375 or so heading into combat - levels that had occurred in October. It is clear to me that as Desert Storm approached, someone decided to make a gold play and pushed the futures up from about $375 to just over $400. This rally fell well short of contract highs ($460.90 on 2/5/90), and well short of the recent top of $421.50. It probably would have happened anyway, too, considering that most trends will oscillate. Judging from the series of new lows that occurred right up to expiration, I think it is fair to say the prewar rally was a "sucker's rally" of first order. This same phenomenon happened recently, on a much smaller scale, ahead of this action in Kosovo. April COMEX gold ran up as high as $297 or so in the first 1/2 of March, and now stands at $280. A level that will certainly not hold. I am not going to be the least bit shy about baiting any goldbugs out there. You goldbugs have been wrong for 20 years and you'll be wrong for 20 more. Nobody has made any money on the long side of gold or gold stocks since Reagan was in his First Administration. I don't know who is worse, the perma-bear crowd that has advocated short-sales of stocks these last 9,000 DJIA points, the goons who chase after small-craps waiting for valuation gaps that really don't exist to get closed up, or the goldbugs that would have better luck making money in gold as 49'ers than traders? Maybe somebody can say they have cashed in as a gold bull, but then again, somebody else can say the lottery made them rich. I think both persons got ahead for the same reasons - luck. I pick on the goldbug because they epitomize trading on yesterday. Gold, my friends, is yesterday. Monetary policy is no more austere on a gold standard than it is off one. Electronic miracles like bank cards that work as Visa/Mastercard at millions of locations worldwide make paper money in most forms itself obsolete. What the hell do goldbugs think, clerks will pull out scales and assay your Krugerrand in order to make change for a burger, fries, and a coke any day now? There is so much malarkey and nonsense underneath whatever bullish case a goldbug might make that it really makes me shake my head. Safety asset! Great hedge against uncertainty!! Gold leases bound to get called in!!! Hah!!!! Gold is a commodity that trades on supply and demand. Supplies basically grow over time, because the material is considered a precious metal and it does not get used up as fast as it gets created. For years, the fact that gold was an essential monetary tool created a tremendous demand factor that kept its price up in currency terms. This is not likely to ever be the case again. Consider how overwhelming the supply situation will become if the world's central banks smarten up and lease out all of their reserves in order to turn a negative return asset into an income-generating one? I hear the issue of gold leases brought up as a bullish argument, but the fact is gold leasing is just a very sensible way to have the best of both worlds - to show gold reserves while actually getting rid of the stuff. No way leasing stops, it will be bigger and bigger as time passes. This means a flood of supplies get unleashed on the open market, folks. Good luck playing contrarian against that. The trend is and will be down. Things change, but people are remarkably slow to adapt. Nobody alive today will ever see $800/oz gold again. They will die having lived in a world where the early 80's gold bull turned out to be a Tulipmania. 20 years have passed, and the things that pushed gold prices up there to begin with are so far gone that you just can't take anything from that period and try to apply it today. Every single time someone is asked "debit or credit" gold as money suffers a death blow. And this is how it should be. Good riddance to the relic, because we should be advancing as a species, not reverting to the savage ways of centuries long past. I have a larger point to make. Trading is about getting tomorrow right. A good way to do that is to not get it altogether wrong. If you extrapolate a trend too far for too long you risk making the biggest mistake a trader will make - you risk being stubborn. The irony of $800 gold is not lost on me, either. Yeah, maybe it could happen, so I keep it on my inventory of possibilities. But do I adhere to this outcome as the only and ultimate outcome in the face of persistent new lows in spite of plenty of things that are supposed to support gold (inflation, war, strong economic growth, etc)? Of course not! You work with a thesis and bear down when it is confirmed and back off when it is contradicted by the fact that matters - price. This is why I am so dumfounded by the goldbug. How many refutations of a thesis does it take before they catch on? _________________________________<<