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Gold/Mining/Energy : Gold Price Monitor
GDXJ 89.99+2.8%Nov 5 4:00 PM EST
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To: d:oug who wrote (78904)10/28/2001 8:35:50 AM
From: Rarebird  Read Replies (3) of 116752
 
The major question, of course, is whether the U.S. stock market is in a cyclical or secular bear market. If it is a cyclical bear market, these markets have either already bottomed or will bottom(make a successful retest of the September lows) in the coming months. If it is a secular bear market, these markets have a lot further to fall over the coming year. When I look at the decline in consumer spending, the coming rise in unemployment, the most recent dramatic decline in housing starts(11.7% in September) and the fact that prices have recently (look at the September figures) begun to fall in regard to real estate(3.7% median decline, but the Northeast was down 13%), I think of the parallels with Japan. What destroyed the Japanese economy was not so much the decline in the stock market but the dramatic decline in real estate prices. This decline in real estate prices has already begun in the U.S.A. Consumer spending will decline much further as real estate prices fall. What I see amongst most institutions who are buying equities in the U.S.A today is desperation and massive denial of the economic reality. They have complete faith that the economy will recover by the middle of 2002. I see absolutely no fundamental economic basis for this belief in economic recovery.

The U.S.A. already has negative real interest rates, which bodes very well for an extremely strong rally in the coming months for the POG and gold stocks. The question is not if but when.
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