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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (1638)	5/21/1999 12:51:00 PM
From: SofaSpud	Read Replies (1) \| Respond to of 3536

Pardon me for de-lurking That said, this is probably an area where on balance I agree more with Friedman than the chairman. I spent a couple of years in the FX group at the Bank of Canada, and so did some of their gold selling. The theory was that you were taking an asset that was doing nothing other than taking up space and gathering dust, and turning it into dollars that could be invested to earn interest. To the relevant authorities, holding gold was nothing more than speculation. In my youth and ignorance, I strongly resisted the view. I used to say that we were just "one headline away" from a spike in gold prices that would make our sales program look like criminal mismanagement. (Seeing the stuff in the vault didn't help -- I understood gold fever for the first time then.) Even the fact that the Gulf war couldn't move the price over about $420 didn't teach me anything. In hindsight, that sales program looks like it was pretty astute. Ten years later the price is $100 lower, and the proceeds have been earning interest in the interim. The confidence argument is probably valid, but at what price?