Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: energyplay who wrote (91613)	6/18/2001 1:09:58 PM
From: rolatzi	Read Replies (1) of 95453

Erdman's thesis is quite similar to what Don Coxe said this last week. Summary of Don Coxes' weekly discussion with his analysis of Euro: Last bubble: Squeeze on the dollar In March traders were overweighted in the Euro 3 or 6 to 1. Global managers were convinced that the Euro was going up. They have been squeezed and it is continuing. Euro is retesting its lows. , Huge amount of money being moved out of Euro equities into British and US equities. Global managers are realigning their portfolios to reflect the Morgan Stanley Index. Ongoing panic with European paper currency. Willingness to take in 14 countries from Eastern Europe will not be good for Euro. Dollar is the presumed survivor currency. This will last until New Year's Eve. Traders think Euro will test lows at 82 1/4 and break it. Cutting interest rates would be good for the currency but their inflation is above target. They are seeing the effects of currency weakness. Energy inflation is much greater in Europe than in US. European Central bank is neutered and is not respected. Deutschmark is down 58% from its peak from the mid 90's while inflation is about the same as in US over that period. This change is not sustainable but need to stand off and you can't predict how low the Euro will go. The Yen will not rise because the Japanese economy has done nothing in 5 years. Only the Canadian dollar is doing well in these conditions. The US dollar is in a bubble because the currency is overvalued by any standard, current account balance, US manufacturing is getting killed by exchange rate. However, paper money panic may build over the summer. If we get the Euro down to 70 cents you will want to borrow US dollars and load up on Euros. Gold is helped modestly by these events. Looking like a major bottom has been made in gold. Whether it do anything other than rally when dollar falls is unclear. Tifs can protect against inflation. Agreement to restrain to sell gold implies that there is a queue to sell gold which would cap the upside. He can't see a move in gold and is a skeptical about shares. A full term currency crises will be good for gold but may be only temporary. Natural gas is still positive. Electrical plant per week is being built. Are embedding greater demand for NG. Have to go to far north for new supplies. Canadian NG companies will see more enthusiasm. The End Rolatzi

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