Forum Archive Index - February 2004

["Baa Baa" <baa_baa@hotmail.com>]

Woody, that would make sense for a trader in metal and forex. I'm not aware 
whether people on this board are that sophisticated. Are they?, or are we 
only talking to each other -not that I trade forex mind you. I don't. I just 
make sure I know the forex effect before making a trade on anything 
denominated in USD, that I have to buy with my non-USD currency.

p.s. Even as Gold becomes currency, it'll always be metal, and precious. ;) 
People might find it interesting to read up on 'standard weights and 
measures' as the underlying value equation of tangible / fungible assets. In 
our debt laden, paper based currency environment, these subtle nuances seem 
lost to the general populous.


>From: "Woody" <solarmax@optusnet.com.au>
>Reply-To: sharechat@sharechat.co.nz
>To: <sharechat@sharechat.co.nz>
>Subject: Re: [sharechat] AUS Gold Stock weakness Reply
>Date: Thu, 5 Feb 2004 14:07:45 +1000
>
>BaaBaa
>
>In my opinion to trade or to invest in the precious metals without trading
>the forex market as well is a recipe for disaster.
>In days gone by a rally in gold sent the USD/JPY to the floor, a decline
>sent it thru the roof. These days that power has been transferred to the
>Euro. The present boring range that has grinded the USD/JPY to an almost
>halt is proof of that.
>The once volatile US Dollar and the sedate Euro have swapped, ever since 
>the
>Euro reached parity.
>The phrase Buy Gold $ell the Dollar has now become Buy Gold $ell the Euro.
>$o you see a good knowledge of the directions of the various Forex Swap
>currencies is a deciding advantage to making money in the Cash World and
>lets not kid ourselves Gold is no longer a precious metal it is a currency.
>
>Woody
>----- Original Message -----
>From: "Baa Baa" <baa_baa@hotmail.com>
>To: <sharechat@sharechat.co.nz>
>Sent: Thursday, February 05, 2004 1:30 PM
>Subject: [sharechat] AUS Gold Stock weakness
>
>
> > ... Checking out the POG in $Aus shows a steady decline since late Dec03
>in
> > an overall declining market.
> >
>http://fx.sauder.ubc.ca/cgi/fxplot?b=XAU&c=AUD&rd=365&fd=1&fm=1&fy=2003&ld=3
>1&lm=12&ly=2004&y=daily&q=volume&f=png&a=lin&m=0&x=
> >
> > Aus Miners will continue to experience weakness until the POG in $Aus
> > recovers. (same deal for the SA's, NZ's) This is a factor of:
> >
> > - dig up the gold in $Aus = expenses
> > - sell the gold in USD = income
> > - convert USD income to Aus, minus expenses = P&L
> >
> > Until the Aus declines significantly against the USD, or put another 
>way,
> > until the POG in $Aus breaks trend and goes upwards, revenues after 
>Forex
> > will decline (for the same volume) and P&L will suffer. This is 
>compounded
> > by FA valuing reserves in a strengthening currency environment, i.e.
> > Reserves @ $US-oz / forex rate = declining value of reserves in local
> > currency = FA weakness.
> >
> > The trigger event we're all waiting for is when the countries with the
> > strongest currencies against the USD realise they're importing US
>inflation
> > and their economies, esp exports, -ergo balance of trade, is suffering 
>...
> > AND ... their response has to be to intervene through competitive 
>currency
> > debasement.
> >
> > We've talked some already about phase two being competitive debasement. 
>By
> > all accounts, it would appear that it hasn't really started yet, so in 
>the
> > interim, we can only look for the pain to continue, or, hope that Gold
> > appreciates in USD faster than the Forex effect takes it away.
> >
> > "What Gold bringeth, the Forex effect taketh away".
> >
> > _________________________________________________________________
> > Surf the net and talk on the phone with Xtra Jetstream @
> > http://www.xtra.co.nz/products/0,,5803,00.html !
> >
> >
> > 
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