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To: Proud_USA_Republican

The gold people sometimes seem to miss that, like oil, when the price goes up, the profit from exploration and extraction increases, which increases the supply of gold. But unlike oil, the uses of gold aren't increasing exponentially, since a lot of it just sits around being used as a substitute currency, meaning if people think they are about to lose their shirts, they'll all start selling their gold into a market with increase supply and dropping demand.



12 posted on 10/30/2006 6:14:33 AM PST by CharlesWayneCT
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To: CharlesWayneCT
The gold people sometimes seem to miss that, like oil, when the price goes up, the profit from exploration and extraction increases, which increases the supply of gold.

If the cost of energy and materials rises along with cost of gold, the extraction costs also rise.

It is unlikely the gold supply can increase at the 8% per year rate that the dollar supply has increased for the last 11 years.

15 posted on 11/01/2006 9:27:07 AM PST by AdamSelene235 (Truth has become so rare and precious she is always attended to by a bodyguard of lies.)
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