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Gold/Mining/Energy : Gold Price Monitor

GDXJ 98.59

-2.8%

Nov 13 4:00 PM EST

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To: Zardoz who wrote (66636)	3/28/2001 9:51:36 AM
From: Rarebird	Read Replies (3) of 116759

<Gold must die, so that the Dow can survive?> The Dow is just a means to an end too.... The Dow will decline dramatically as unemployment rises and earnings continue to decline to the point where they turn negative. The monetary mechanics of the World have blown it. The net external debt of the U.S. stands at about $US 2.2 TRILLION. Foreigners already hold the fantastic sum of $US 10 TRILLION in U.S. financial assets (i.e. paper in all its forms). The U.S. private savings rate is at - 0.8%. The accelerating rate of borrowing is close to being the highest in U.S. history. This is a nation that is running a current account deficit of close to $US 500 Billion annually, about 5% of its GDP. The rest of the world has to fund this deficit to the tune of almost $US 2 Billion a day. Bush's budget is based on the ability of the U.S. to borrow that daily sum - for the next 10 years. If they can, they will borrow at least another $US 5 TRILLION from foreigners over the next decade. It is impossible for the U.S.A. to engage in yet another decade of sustained and accelerating credit expansion! The only way that can happen is if the rest of the world consents to lending the U.S.A. another $US 5 TRILLION - at least. I don't see it happening. Why has the ECB refused to lower rates? Pretty soon, all of Asia will be back where they were in 1997 - with the U.S. in recession! Bottom Line: If the rest of the world cannot or will not lend $US 2 Billion per day to the U.S., the economy will CRASH. Having the CB's unload their Gold Reserves will only provide temporary help to the situation and then "they" lose control. Greenspan is vigorously manipulating interest rates, reserves, and liquidity conditions inside the U.S. financial system, all in an attempt to sustain "growth". That this is possible and that it can be sustained for the indefinite future seems to be taken for granted. However, the U.S. DOES NOT HAVE THE MEANS OF FINAL REPAYMENT OF ITS DEBT! MUTUAL BANKRUPTCY STARES BOTH SIDES IN THE FACE, the lender and bag holders. Free Golbal liquidity can become exhausted. Got Gold?

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