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Strategies & Market Trends : Ride the Tiger with CD

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To: TheSlowLane who wrote (5034)2/27/2004 2:47:46 PM
From: yard_man  Read Replies (1) of 312344
 
there's a fundamental misunderstanding here -- that gold prices will go up with interest rates -- or that gold prices are predominantly tied to inflationary expectations

>>And you say “Wait a minute now, gold prices are going down. Why should I want to have a higher weighting?”. The answer is because if this thing unravels, if Japan and China decide what they need to do to create profits among their companies is to move their currencies up, it means that, at least for a while, they’ll stop buying Treasuries. I doubt that they’re just going to start to dump Treasuries, there’s nobody to sell a trillion Treasuries to, but all they have to do is stop buying and the price of gold will go to a new high very fast. <<
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