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Gold/Mining/Energy : Nuvo Research Inc

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To: Montana Wildhack who wrote (6919)	3/12/2001 10:37:32 PM
From: Montana Wildhack	Read Replies (1) of 14101

The only technical analysis I'm interested in now is volume. The move today has almost nothing to do with Dimethaid and everything to do with the markets. In the early 1980's the Japanese thought they had found a new economic model that did away with the traditional cycles of growth and recession. In the late 1990's the americans may have made a similar mistake. By human nature growth always becomes excess. In the 1990's the US and the world discovered stocks. In the US, that newfound wealth effect meant that Americans stopped saving. From 6% of GDP in 1990, they for the first time ever have negative savings which topped -6% of GDP last year. This resulted in the largest current account deficit in history. This now has to be funded without the great (sincerely) US engine racing for a while. The new SUV will have to wait while the value of the stock comes back to the amount borrowed to buy it. Inevitably the need for more brings on unsustainability and with it the corrective cycle. Business cycles don't happen for economic reasons. They happen because of human nature. I sincerely believe we're a ways away from a sustainable turn in the equities markets. I also believe 3 years from now Nortel will be over $100 again. If you have a stock with good prospects wait for it. For over 100 years, equities have outperformed in the long run. The good news is that many governments killed their deficits this time and are in a position of surplus. That's hugely important. This may not take that long but has two significant risks. Japan dithered and did not fix while the US carried the world economy and now that it needs a breather - Japan's economy and banks are still sickly. And two, sooner or later, the Americans will realize they need to start saving at the household level again. The impact of that on demand in an economy already waiting to reduce inventory has not been felt yet. Good luck everyone. Wolf

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