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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: chip who wrote (1944)11/16/2005 10:18:41 PM
From: SouthFloridaGuy  Read Replies (1) of 78419
 
Thank you, for as much as we talk about gold being up in $ terms, it's up WAY more in Yen, Euro, Sterling, etc. terms in the last few months.

The implication being that there is long-term expectation that all currencies will be debased.

The reason the USD is appreciating is because it is currently being debased less than all the other toilet paper out there (only b/c our economy is in relatively better shape for now).

But that still doesn't totally explain the actions of the long-bond unless it truly is different this time and predicated on a bunch of irrational Asian investors.

I don't buy that. I think people are buying bonds because they buy the secular deflation theory coupled with helicopter Ben attempting to fight it with "quantitative policies" (taking terminology from the Japanese).

The problem is that Greenspan has been trying that for a while and all you get is a yield curve that flattens/inverts at lower and lower levels because liquidity keeps getting filtered back as each successive bubble is predicated on more and more debt, with the end-game being liquidation that the Fed is unable to fight because they lack ammunition to stimulate borrowing (manifesting a carry-trade).
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