Gold Price Monitor Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor

GDXJ 110.89

+1.8%

Dec 10 4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Helios who wrote (53970)	6/9/2000 2:13:00 AM
From: Rarebird	Read Replies (1) of 116808

Helios: I think the Fed funds rate will be raised from its current level of 6.5% to 7.25% by the 3rd quarter of 2000. The 50 basis point increase in May signaled that the Fed is out to squash any possible inflation. Moreover, a careful reading of the notes form the May 16th meeting shows that the Fed is committed to raising rates in the future: "The risks are weighted mainly toward conditions that may generate heightened inflation pressures in the foreseeable future." I do not think that the equity market has priced in an additional rise of 75 basis points. Moreover, the Poly's have not fully capitulated yet, and many "new era" investors have been fighting the Fed based on the historically-observed effect that high-tech capital spending is generally insensitive to interest rates. HA! HA! HA! Let me inform you that Technology stocks follow a cycle of boom, followed by the building up of inventories, followed by bust. It looks like we may have reached a peak in the technology cycle. Want to talk about earnings? The time to worry about earnings is not when they are weak but rather when they are strong. Do you really think that Fed tightening will not have a dramatic effect on earnings moving forward? Let me tell you a secret, Helios, before it's to late: Earnings growth for your darling high techs is unsustainable in the face of higher interest rates. The only way the market could experience some kind of rally at this point is if the Fed surprises the market by not raising rates further. If I was you, I'd diversify as soon as possible. Why not buy what most investors/traders have already trashed and sold and which represents the inverse of this great bull market? The unthinkable is thinkable. The Impossible is quite Possible.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next