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Gold/Mining/Energy : Gold Price Monitor

GDXJ 101.44

+3.5%

Nov 12 4:00 PM EST

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To: Hawkmoon who wrote (66011)	3/18/2001 2:28:55 AM
From: Rarebird	Read Replies (1) of 116757

<I think the Japanese government is holding mainly US T-Bills> I think you are right about that. But how long do you expect that to continue given their dire economic situation? Sure, the Japanese get a much better rate of return on US T-Bills here. <a weak yen favors economic recovery.> That's certainly been beneficial for their exporters in the past. But with the economic downturn just beginning to hit the USA, a weak Yen may not help all that much, given that the US consumer is all tapped out. <Japan is in a liquidity trap. Much of our reasoning as to what constitutes sound economic policy is not really available to them.> Japan has needed to cut taxes rather than raise them. Stimulating an economy requires a lot more than just lowering rates. <We're going to see capital screaming to come over here due to the risks everywhere else> Outside of T-Bills, haven't foreigners, including the Japanese, been big net sellers of US equities to raise cash? If the liquidity crisis gets even more severe, the Japanese will be forced to eventually sell their T-Bills too. If and when that happens, the fat lady sings and gold wins.

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