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Gold/Mining/Energy : Precious and Base Metal Investing

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To: russwinter who wrote (3171)	4/22/2002 5:04:54 AM
From: lbs1989	Read Replies (2) of 39344

View from The Sand Box Dear Russ, I have been thinking about your excellent posts 3096 and 3139 and would like to throw in some Geopolitical points to ponder. The current fiat money system and the boys who run it for their own benefit have several structural problems for which there are no easy solutions. I believe therefore we are in for a paradigm shift. USA Issues Record Trade and Current Account deficits. The last time in 1985 when it wasn't quite this bad the Buck went from 2.87 Swiss francs to about 1.4 in 1987. The Pound went from $2.00 to $1.03. The dollar will only get weaker IMHO. The Euro is now an alternative for the world as a reserve currency. Shifts are already taking place. Deficit spending for the War on Terror is a fact. It is a war we can not win. Why? By definition a CONVICTION is a belief you will not change unto death. Are the terrorist prepared to die. You bet and be rewarded in heaven in the process. Middle East Conflict and regional instability. Absolutely. Oil price instability. Of course. JAPAN Hugh Bank debt problem. Down grade of Sovereign debt to the same level as Malta. The next one means it starts coming out of some very big portfolio's. Reduction in amount of savings account insurance for the worlds most prolific savers. What are they going to do with the cash that is not guaranteed? Some are already buying gold. Reduction in the rate of capital formation. In a recession since the 1989 stock market bubble burst. Boom based on inflated real estate prices and very low interest rates. ARGENTINA IMF doesn't want to give them anymore money. More fallout to come CHINA Hugh deficit spending and jobless problems. Hugh insolvent Banking/Bad debt problem. G-7/ IMF Developing Official Sovereign Bankruptcy Policy. Government debt without the "full faith and credit" slogan. Where oh where will we put our money? We have been having fun and making some money with gold bouncing around $300 because some argue the market has been manipulated. Well since my FED Chairman said Central Banks stood ready to sell gold , their is no doubt in my Military mind that that is just what the boys did to perpetuate the Gold Carry trade in the same manner as they profited from the Yen carry trade. It was a stressful job but someone had to do it. Thanks Alan! In a macro sense there is nothing but trouble on the horizon and there are some very difficult problems to be solved. I would therefore like to propose that for the sake of discussion $300 gold is the "Atlantic Wall". If we breach it Patton can make a run for it, but the war will not be over and there will be more than one "Battle of the Bulge" as things shake out. Our current gold favorites have mostly become "fairly " valued at this price level with current known drill results and reserves. But where would we be from the $410 level in February 1996 if Alan and the boys hadn't needed to control the fair market value of gold today? $600? Maybe. At this juncture we can think about rotating into other sector(s) as if this was a conventional market and these were not extra ordinary times or we can say, what should my plan be if the worlds problems can't be "managed" by the boys and girls that got us into this mess?!! I am not a TA guy but I keep thinking $400 is where we were before the "slight of hand" started. What would the game plan be for the gold stock universe if we go to $400 gold in the next 12 to 18 months? Who should we buy? Would we rotate around the Mining Insight categories of Early Exploration, Advanced Exploration, Feasibility and Producers? Should we post those 4 sectors as a basis for further analysis , discussion and review? I think you have done this thread and me a world of service with your frank comments and unselfish analysis. I just wonder if we shouldn't have a contingency plan discussion in case AK-47 is really Henry Kissinger trying to give us a message? Don't sell to soon!! What if Gold does go to $400 in 12 to 18 months? Best Regards,

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