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To: long-gone who wrote (31966)	4/17/1999 10:17:00 AM
From: goldsnow	Read Replies (1) \| Respond to of 116764

Can you blame India for gold passion? India Coalition Government Collapses After Parliament Shows No Confidence India Coalition Govt Collapses; Loses Confidence Vote (Update2) (Adds stock market close, more comments and background.) New Delhi, April 17 (Bloomberg) -- India's ruling Bharatiya Janata Party-led coalition became the third Indian government to fall in as many years, triggering a stock market plunge and concern that delays in reform and spending could hobble the economy. The government of the world's most populous democracy lost a confidence motion by one vote, with 270 members of Parliament voting against the motion, 269 voting in favor and one member abstaining. The Mumbai Stock Exchange Sensitive Index plunged 245.93 points, or 6.9 percent to 3326.98 as investors had expected the government to survive. The fate of the country's national budget as well as important economic reforms -- including the opening of India's insurance industry to foreign investment -- will be in doubt until a new government is formed by a new coalition or early elections, analysts said. They said any new coalition will likely be as unstable as the last one. ''We will have a weaker government and the inherent stability problem remains,'' that will hurt the economy, said Mona Chhabra, an economist at the DBS-Capital Trust Securities India Ltd. in New Delhi. Prime Minister Atal Behari Vajpayee was forced to prove his majority in the lower house of parliament after a key ally, the All India Anna Dravida Munnetra Kazagham withdrew its support on Wednesday to protest the firing of a Naval chief. Next Steps After Vajpayee tells President K.R. Narayanan that he and his cabinet resign, the President will probably ask the Congress Party to form a new government, analysts said. ''The ball is now in the President's court. He will now ask the Congress party if it has the majority support to form a government,'' said N. Bhaskara Rao, chairman of the Center for Media Studies, a New Delhi-based think-tank. Congress has the support of more than 142 members and needs the backing of more than a dozen small parties to stake its claim to form a government. The Congress party has ruled India for about four decades since India's independence in 1947. Congress and its coalition allies will then have to prove their majority in the Parliament, said Rao. If it is not able to do that the country will have to call early elections. The possibility of ''mid-term elections still looms large on the nation,'' said Rao. Future Concerns India needs more political stability and governments that interfere less in the economy before its growth will accelerate, analysts said. India's gross domestic product has slowed to a gain of 5.8 percent in the year ended March, compared with an average growth of 6.8 percent in the previous three years. ''The prospects of a real revival in the capital market remain distant,'' said John Band, executive director of ASK- Raymond James Securities India Ltd. in Mumbai. Analysts said the creation of a government may lead to delay or even changes in the budget for the year ending March, 2000. The political instability is also likely to hurt the economic reforms program of the country as new parties get to pick at the previous government's proposals. ''Since the left parties will play a bigger role (in any alternative government), it will be difficult passing the insurance proposals as well as privatization and reforming of state-owned companies,'' said Chhabra. The BJP-led government had planned to sell shares worth 100 million rupees ($2.3 billion) in state-owned companies in the year ending March, 2000. ©1999 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.

To: long-gone who wrote (31966)	4/17/1999 12:00:00 PM
From: sea_urchin	Read Replies (2) \| Respond to of 116764

Richard : I have heard all the reasons and the stories but remain unconvinced. As I said, my own analysis does not show that gold is unduly cheap compared to currencies. And, if we look at commodities, I'm sure it's not cheap compared to those, either. Of course, compared to equities, especially Internet stocks, it is dirt cheap. But then, gold is a relic of the past and there is no reason why it should be more valuable. All one can do with gold is hoard it or wear it. And it doesn't get used up --- like Coca Cola. And, it doesn't produce the expectations of an increase of earnings. The argument that gold is cheap means that gold has to be cheap compared to something. What? And, if it's expensive, there has to be a reason for that, too. The price of gold cannot go up just because it's gold and because we say it's worth $500! Or that it's about time it went up. (Which it probably is!) And because the gold price isn't what we say it should be, ergo--therefore someone is conspiring to keep it cheap. If large gold owners wish to lend it to sell, or sell it straight, it is their free choice to do so. If they are selling it for less than it's "worth" then someone is getting a bargain. Short sellers have to buy in, eventually. When the dollar is the strongest currency in the world, I just cannot see why the US government is conspiring to depress the price of gold. That would mean they are trying to make the dollar even stronger. To do that, they just have to tweak up interest rates. If the POG were to rise, for example, the capital gain for certain people would be miniscule campared to the gains already achieved on the stock market. So, spite surely can't be the reason. To keep POG down to skew inflation data makes no sense when the economy is so strong. Sorry, I just cannot see why the government would specially want to depress the gold price. OK, some institutions were short and wanted to buy in --- but that happens every day in every thing that can be bought or sold.

To: long-gone who wrote (31966)	4/17/1999 7:52:00 PM
From: Bob Dobbs	Read Replies (1) \| Respond to of 116764

Just a reminder - Frontline program on Global Instability airing this Tuesday, April 20th, 1999. Check it out! Global Economy FRONTLINE explores the dynamics of the global economy in an era of risk and instability. Less than a year ago, Russia devalued its ruble and defaulted on its debts. Ten days later, the world's major markets tumbled and American investors saw the worth of their savings and retirement funds plummet. Fear spread that the global economy was indeed unraveling and arguments rose over who were the real culprits in the crisis. This program will gather some of the world's leading financial analysts to debate the reasons for the crash of 1998 and to predict whether it will be repeated in 1999. CC, Stereo, Exempt Educational Taping Rights: 1 year -- For more information see PBS TeacherSource TV Listings -- Check Local Listings 04/20/1999 -- 9:00pm Satellite 04/20/1999 -- 9:00pm, 2:00am, 4:00am 04/24/1999 -- 4:00am Bob