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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: rails99 who wrote (88738)3/16/2001 3:15:22 PM
From: Hawkmoon  Read Replies (1) of 95453
 
I have been trying to keep track of it... but I keep getting confused as to whether I'm reading about Oil field services or finding myself being transported the GPM gold thread.

Btw, I might find myself proven wrong here, but I wouldn't be looking at gold to move to the highs y'all seem to be predicting.

Gold is not particularly liquid, nor are we facing hyper-inflation, or weakness in the USD (which is strengthening, if anything). That suggests that cash is king and we're that in the increase of the MZM at a 19% pace (I've heard even higher).

And that's cash that's looking for a home where it can draw higher than money market rates of return.

Combining that with the fact that the Western power crisis will still likely be with us this summer, placing pressure on domestic NG prices and fuel oil, I perceive oil drilling services as one of the "safest" places for that excess capital to be deployed. It might create a bubble in the OSX, but that hasn't stopped institutinal investors before... They just want to be in a stock that is continuing to top earnings estimates. I know of no other sector except the OSX and XOI that meet that criteria (if OPEC manages a production cut today).

But I don't see the case for gold. And Wanniski's comment about devaluing the USD along with the yen, doesn't seem, imo, to resolve that problem, because Europe would just follow suit and we all be seeing our currencies trading between one another at the same exchange rates. The only sector that would seemingly benefit would be the gold producers and that makes little economic sense (except to the diggers, of course.. :O)
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