Good thing they are not employed as purchasing agents of major national retail outlets. Buying high and selling low can cost you your job in a business world that is profit driven.

A good friend of mine who has been in the gold coin business for 37 years has just reported a dismal response to his newsletter mailings to longstanding clients. He attributes that to the fact that it's tax season, and to many gold bugs being disappointed by the recent hammering of the gold price from its (not really all that lofty) $380-plus level in February.

Maybe the factors are of an emotional/psychological nature. Why do people buy gold? Well, that depends on what category you fall into. Gold "bulls" are really paper-tigers. They are simply looking to turn gold trades into paper profits. Gold "bears" - well, they just like their paper diet too much. But gold bugs supposedly buy and hold gold because they are firm believers in its monetary qualities of honesty and fiscal discipline, and they have a fervent belief that eventually - some day - gold will trounce all other investments and return to its rightful place among the $1,000-plus stars of investment heaven.

But gold bugs have a major deficiency. They know better, but the "world" of paper-money investments constantly dumps on them for being a "stupid", "extremist," "anti-social", "anti-government", "anti-progress", retrogressing bunch. Guess that takes a psychological toll on many.

"But the news out there aren't that bad, really. "Grass roots" physical demand is reportedly strong around the $322 to $325 level. That means a lot of people get the message. But if my gold dealer friend's clients are indicative of a trend, one might conclude that it is really the big-time, "smart" money crowd that provides this price support (you know, those who pull the anti-gold paper levers to keep their high-paying jobs, but who know the jig is up and quietly invest in gold while pooh-poohing it all over the media infested market place), not the bugs that populate the roots of this abundant plant."

Maybe gold-bugs need to go deeper into their introspective cocoons first and meditate there in order to grow some wings. Only when they undergo this process will they finally emerge and fly during investment spring-time, taking their rightful place in the sky as golden butterflies. And maybe the certainty of the knowledge that the euro will without any doubt trounce the dollar - one way or another (and knowing why!) - may help them in their transformation.

Remember: the euro shoots gold-bullets, while the dollar tries to hide behind a shield of paper. It doesn't take much to figure out who will win that battle.

As a very knowledgeable poster on one of the gold forums likes to say:
"Gold ... get you some!"

Copyright, Alex Wallenwein, 2003.

awallenwein@houston.rr.com
www.a1-guide-to-gold-investments.com/euro-vs-dollar.html

April 21, 2003