<Only an idiot would try to blame Greenspan for all of this.>
The US economy "grew" by 8.2% in the third quarter. The trade/current account deficit doesn't matter, it simply reflects the global demand for US assets. Official interest rates will stay at their present 1.0% level until 2005. LOOK AT THE STOCK MARKET! Everything is beautiful, isn't it, especially if you called the end of the Bear Market in Gold Stocks on October 25, 2000 and started accumulating?
Message 14655257
Message 14655181
The orchestrators of all this are on Wall Street, at the Treasury, at the Fed, and in the boardrooms of Central Banks throughout the world, most notably in Asia. The Fed keeps interest rates at ridiculous levels, the Treasury keeps pumping out new debt to enable the Bush Administration to spend to the tune of $US 20,000 plus per American household and to borrow at historically unprecedented rates. Wall Street sees an avalanche of this new money placed by large institutions and by investors who can't find a domestic rate of return anywhere else. And the foreign Central Banks, especially the Asian Central Banks, keep creating vast amounts of new domestic currency in order to buy Dollars in order to recycle the Dollars back into new Treasury (and Agency) debt in order to keep the wheel turning over.
ALL of the economic and financial FACTS and the news reporting these facts - the budget deficit, the trade and current account deficit, the swooning Dollar, the decimation of US manufacturing, the PRICE RISES which the Fed claims it cannot see - ALL of this and more is submerged in the great Wall Street stock market rally of the past year. US mutual funds are now enjoying an inflowing surge of new investment capital only bettered by the all time record set in 2000 - the year of the market top. Wall Street bonuses are at their second highest level ever - again only bettered by the record set in 2000 - the year of the market top.
When it comes to investing/longer term trading, I accept the mindset of these Bozos and act accordingly. I don't allow my personal feelings to interfere.
I'm not surprised in the least at what Greenspan has done. 1% Fed Funds is great for Gold and the Miners. No reason to sell (outside of taking initial investments off the table and play with house money) just yet. I'm expecting around $500 Gold in the first quarter of 2004. |
