Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Olaf Koch who started this subject	5/20/2001 12:59:05 PM
From: SliderOnTheBlack	Read Replies (1) of 95453

Fed Challenge: protect the currency, or stimulate the economy ? From Northern Trust's Intnl commentary: [The month-to-month movements of the trade deficit should be viewed in light of the overall trend that is in place (see chart below). The current account balance -- a broader measure of the trade gap - as a percentage of GDP has set a new record. The growing deficit reflects the willingness of foreigners to lend. A change in perception of the relative risk and return profile of the U.S. compared with the rest of world will result in a sharp plunge of the dollar. In the absence of an orderly correction of the trade imbalance, the Fed will face a challenging choice between protecting the value of the currency and stimulating economic growth. ] The growing trade deficit keeps widening...tic - toc for the US dollar. The interesting catalyst for Gold remains whether it can create a short-covering derivative crisis that will take gold & gold stocks beyond any normal, or historic fundamental valuation metric & that is still much of the remaining attraction here. It's going to get real intersting... I have a feeling that all those who are buying stocks based upon the traditional bet that given the Fed Cuts we've just seen - that the US economy & corporate earnings "must" and "will" dramatically improve are perhaps ignoring & over-discounting the still bubbleonian market valuation multiples and the effect of a one-time, non-repeatable, non-recoverable level of tech cap-ex spending. DOW 11,000 looks awfully rich to me & I see very, very few tech stocks that offer any compelling reason to own long here. I still think the NAZ has a good chance of setting new lows by the end of summer, early fall. I've added some trading shorts... wish I could borrow a ton of KREM somewhere - letting some golds run/ doing some trading & waiting for a pullback in late-cycle driller/service and adding some NG E&P shorts into all further strength here... I anticipate being up to 30% short NG on a portfolio basis if they make another run up here... love them short at new highs - perhaps the single best trading idea in the entire market are NG pureplays trading at the top of their hisotric multiples short - on new highs imo. Unless we get a reversal in the economy & in the AGA builds - it's as close to a no-brainer as has existed in some time - only exceeded by shorting KREM (VBG).

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