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Gold/Mining/Energy : Newmont Mining(NEM) & Newmont Gold(NGC)
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To: Paddler who wrote (412)6/6/2000 1:15:00 AM
From: ahhaha  Read Replies (1) of 587
 
If you had read my earlier posts in this thread and others, you'd know that intrinsic deflation ended 9/1/98. Since then we have been in a transition to intrinsic inflation. The proof is seen in the nice uptrend in, for example, this stock. NEM is gapping up with tech stock short covering.

Any relief, even psychological, from interest rates allows gold stocks to rise. Gold stock movement reflects the move back into intrinsic inflation that FED is inadvertently allowing. This is an infinitesimal effect and it is as inscrutable as Smith's invisible hand of God. There is no conscious effort on balance by forward looking individuals to bid up the price of gold. Since I'm the only person in the world that understands why, there can be no justified convicted buying.

The FED can't get tough because they think that would mean the end of prosperity, so they prop at the margin, and this has the intrinsic effect of first allowing and then forcing people to raise prices. Propping now pushes price more than it pushes production. The FED's interference in the free market has now created a point of no return which has guaranteed a good move in gold. I calculate it will last about 16 months.

By then the FED will have allowed fed funds to freely float. I can't predict the rate to which the interbank rate will rise. That depends on how stupid the fed officials will be and to what extent they never learned the true lesson of the last cycle. So far, they all sound much like McDonough who is the most dangerous powerful individual in the system. McDonough is a throw back to the square well control freaks of the socialist East Coast demand management school. He'll get it fixed if it kills you. On the road to serfdom you might as well pick up a few nuggets.
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