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Strategies & Market Trends : Precious Metals mutual funds (gold, silver, PGMs)
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To: Wade who wrote (878)9/16/2004 11:19:42 PM
From: Larry S.  Read Replies (1) of 972
 
Wade, et al,

It is interesting that a PM fund is on top but not very surprising. At some point and I suspect sooner that later, out economy has to come down to earth and the dollar has to fall significantly. The August Monthly Treasury Statement was put on the Treasury's Website this past Monday. While the Unified deficit was only (sick g)437 billion, the real deficit (ON budget plus interest paid on treasuries in Trust Funds (TFs)associated with the payroll tax) is $683 billion. The fiscal 2004 deficit will clearly exceed $700 billion by a wide margin. The Off-Budget item in undistributed receipts (essentially interest on the debt held in TFs associated with the payroll tax) was 110 billion. Total debt, Gov. and private, is now over 300 percent of GDP.

I don't recall anything in Barron's of significance to PMs this past week. However, lease rates suggest that leased gold is continuing to be used to cap the POG. When the price rose earlier this week, the one-year rate hit an all-time low of 0.145 percent. The rate rose as the POG retreated.

The GMI/POG ratio:

On 09/09, the Barron's GMI was 608.46, down from the previous week's 617.28. With the POG essentially unchanged at 401.35(09/10), the ratio fell a little to 1.52.

The ratio continues in the middle range where it doesn't suggest a rise or drop in the POG.

The ratio a year ago was 1.61.

Larry
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