Vargas,
Two things that got me confounded are the persistent upward trend of the stockmarket and low inflation. Despite continued warnings from eminent investment gurus like Warren Buffet and Doug Casey that the market is dangerously overvalued, the market somehow continues to trend upward time and again! And time and again, we hear that unemployment is down and inflation is low!
Rightly or wrongly, I suspect some government (especially the US Govt) conspiracy or manipulation is at work to keep the market trending upward to keep investors happy. What for? In the US, President Clinton is facing the prospect of impeachment down the line if the Whitewater and Paula Jones and other scandals and the illegal receipts of election funds from the Communist Chinese prove to be charges serious enough to warrant his impeachment. If investors are kept happy now, they would be against impeachment and the President will likely be home free! (To be sure, the markets and the investors will be hugely devastated by a presidential impeachment!)
Again, rightly or wrongly, I suspect the price of gold is somehow held low at present levels in order to help with the European central bank adjustments of gold reserves to ensure that monetary union will succeed in 1999. If I am correct, it looks like gold will be in the doldrums until 1999! O what a wait! By the way, John Kaiser of
Bottom Fishing fame (or notoriety) opines that gold will probably have to wait till the beginning of 1998 to see some real action.
Anyway, just like you, I tend to think that gold will make price spikes up now and then along the way for us to take advantage of the situation.
Cheers!
Richnorth |
