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Gold/Mining/Energy : Precious and Base Metal Investing

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To: TheSlowLane who wrote (25093)	12/6/2003 7:22:05 PM
From: yard_man	Read Replies (2) of 39344

he makes too much of comparing one months GDP number to Fed funds -- Contrary has better handle on Fed funds vs. levels of growth. That a shift is taking place regarding the USD is evident -- what is not evident to many people is how BIG the shift is that has already taken place -- owing to the very wide ownership of USD assets -- i.e. decline this time, not like last time. The argument about other countries "re-pricing" their commodity exports in terms of euros or renimbi or anything else is a non-issue. those commodity prices already float with respect to our currency. Regarding the Chinese or any other producing nation trying to get control of the markets of the commodities which form their raw inputs OR to hedge the prices of those raw inputs is only natural. Nothing earth-shaking there either. Ultimately, foreign buying of gold will push it to new heights -- along with energy, foodstuffs, etc. It is well known that gold runs with stocks ... gold has never been the "anti-stock." It can rise in periods of both weak and strong equity prices -- but being a commodity traded on a wolrd-wide market -- if the dollar goes down (the pre-eminent currency) -- by definition, gold must go up. Gold is anti-dollar and anti-fiat over intermediate to long time periods -- it has to be. The shift to other currencies is apparent. It is not unreasonable to expect this to continue, IMO, BUT even after it has run its course for a time -- gold can still rise against currencies in general -- especially, if debt growth contracts -- because it is only debt growth that makes the largest number of "financial" assets 'appear' more attractive than gold in the short term.

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