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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: John McCarthy who wrote (20777)	9/18/2006 11:42:04 AM
From: Rarebird	Read Replies (2) of 78421

>>The only way out of this stagflation mess is for the Treasury/FED to reflate<< FED constraint continues to bite, with the monetary base now declining and M1 falling at a 6.4% rate. The inverted yield curve persists, since 1960 a flat or inverted yield curve preceded all seven recessions. The ECRI weekly leading index for mid-September is negative. Retail sales to consumers are stagnant. Jobless claims continue at a high level, well in excess of 300,000 weekly. And worst of all, is the unfolding deflation of the housing bubble. Perhaps the greatest peril of all lies with the excessive commitment of financial institutions to this bubble. Intent on maximizing current revenue, 43% of all US bank assets are tied to real estate. The FED reports 62% of banks earning assets are real-estate related. And one after another builders are lowering expectations and bracing the financial media for lower sales and earnings. Many are betting heavily that short rates will fall. Indeed, the broad market confirms this. The FED targets a 5.25% rate yet 2 year bonds sell at 4.84%. This bet on lower rates implies not a change of heart at the FED, rather a wager on a rapidly slowing, maybe recessionary economy. My Gold Mining Outlook: Message 22820191

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