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: Kavika who wrote (80981)	12/7/2000 2:52:07 PM
From: SliderOnTheBlack	Read Replies (2) of 95453

Kavika; re: small cap Golds... I don't think that they traded much higher 1-2 years ago (not 3-4?)in the midst of the Go-Go Tech Rally had anything to do with Gold Stocks... this is NOT just a flight to safety rally here from weakening tech. The Gold stocks are mainly trading as an inverse proxy to the US Dollar here. The entire explosion - actually; an unfathomable, unbelieveable exponential increase in the Gold Short - Derivative Trade that occured in Sept 1999; used those Gold short sale proceeds to go long the US Dollar in leveraged derivative positions. Rubin came from Wall Street & went back to it...he orchestrated King Dollar. Don't think that these Wall Street Banks & Hedge Funds didn't have an inside "nod" that Gold would be "stabilzed" to minimize the market reactions of Gold indicating the inflationary impact of strong GDP growth, hot consumer spending, full employment and $30 Oil - when the Fed wanted to minimize any & all indications of inflation. In fact they were & are the "tool" used by the Fed - part of the PPT used to intervene and stabilize - read "manipulate" markets for our own good. Chase, JP Morgan, Deutsche et al - shorted Gold & went long US Dollar derivatives as a tool of Rubin & Greenspan. Unfortunately; they got greedy & ramped derivatives to unthinkable levels - and Greenspan continually warned them of that... Rubin; also left right at the top; where things turned here... the writing on the wall was allready seen by Rubin - he did the smart thing & got out of Dodge before the bullets started flying & he knew these banks went way, way over-board. Gold is going to move up substantially because the US Dollar levels with our present Account Deficit can NOT continue to be sustained, nor can it any longer be manipulated with derivate leverage which is out of control. The US Dollar will not maintain its strength with the Euro being supported, with Crude oil retracing and especially with "ANY" Fed Cuts. King Dollar was "propped" up to begin with; but now it's created stress fractures in foreign currencies AND economies & it has crushed US corporate profits and it had much of it's invincibility here of late; due to 6 straight Fed Hikes... now that the Fed is likely to have to lower rates to ease a slowing US Economy; let alone to rescue a collapsing equity market - the Dollars direction is merely a question of - how low will it go... Gold & Gold stocks have 4 upside catalysts converging all at once presently and #5 is the potential icing - final speculative upside catalyst. 1. Historic alltime low buying opps/valuations 2. US Dollar unsustainable for the reasons mentioned above 3. Flight to safety from a jittery market 4. A Hedge against falling crude prices for OPEC Petro-dollars 5. Short Squeeze from unwinding of the Gold Short Derivative play - of which much of the Gold Short sales proceeds were placed in leveraged "long the US Dollar" positons. PS: imo - the reason they were at "all-time" lows weeks ago; is that we saw very predictable tax loss selling that I said was a major factor - that many poo-poo'd here; but also that the US Dollar was still looking strong & Crude Oil was holding. We saw the final capitulation - that's all... we "should" get a strong bounce; then base and hopefully return to XAU 75-90ish in even a calm market environment in 2001 imho. That's 50% upside without ANY market crash and I think we will see XAU 75 "sometime" during 2001. That's 50% upside; allthough I think there will be lots of "doubles" especially in small caps. I also think we've got a good chance to see XAU 90-100 next year and "if" we see a market crash,or "Event"; or "if" the Gold Short Derivative Market gets hit by a Price of Gold spike thru $315-325; then we see XAU 125 potentially. We've had 5 XAU rallies thru XAU 125-150 in the last 15 years and most were off of "V" bottoms: finance.yahoo.com^XAU&d=mym Gold & the XAU have continually been given their last rites in between each of those rallies... this wasn't the first time, nor will it be the last that Gold reached parriah status... that's also a common characteristic of commodity cyclicals - nothing new there. Many of those rallies have come at the end of "oil price shocks" and I expect another one here... "how high" is the question; not "if" we go higher; merely - "how high" ? It's no longer - Got Gold ? It's - "if not now - "when" ? and how much do you "got" (VBG)?

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