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Gold/Mining/Energy : Gold Price Monitor
GDXJ 97.99+0.3%4:00 PM EST
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To: Bruce Robbins who wrote (62494)1/5/2001 6:53:56 PM
From: russwinter  Read Replies (2) of 116753
 
The whole financial system is in severe stress right now. What is interesting about today's wage report is that average hourly wages in the US are up 4.2% year to year, not exactly non-inflationary. So these rather desperate attempts to shove liquidity at the banks comes right at a time when inflation is worsening. The weakening dollar means that inflation will start showing up in imported items as well. But the problem Greenspan needs to solve relates to credit quality, not quantity. It's not about new loans it's about the multitude of old ones.

Finally, the thing that is suspect about gold's action this week, was the complete lack of price movement. There is no price beta. It is virtually the only commodity, financial asset or market in the world right now that is not in extreme flux. In fact, quite the opposite, it acts comatose and drugged. Common, who are they trying to kid? There is no doubt anymore in my mind that gold is one of last legs of a derivative pyramid that is about to break. The only thing holding this Frankenstein monster together is the ability to borrow (sell)at nominal rates in both (depreciating) Yen and Gold and then speculate on financial assets. That trade has not only been maxed out, but it has failed on the asset side of the ledger and the seams are breaking all along the waterline. Time to close out (buy back)the debit side as well. This one will make Long Term Capital look like a cake walk.
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