Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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From: Chispas	7/8/2007 11:33:05 AM
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Gold Eagle Forum - A CHECK ON PM LEVERAGE TO A DECLING DOLLAR (LoneRanger) Jul 08, 09:11 Please note: All numbers are based upon data as of April 21, 2007 figures -- which are slighty differen today. Nevertheless, the magnitude of the changes are correct. ---- During nearly 6 years of the evolving PM secular PM bull market, gold, silver & HUI have demonstrated an impressive INVERSE LEVERAGE to the US$ per the following: US$ down 31% last 6 years (since Feb 2002) stockcharts.com Gold up 133% last 6 years (since Feb 2002) stockcharts.com Silver up 208% last 6 years (since Feb 2002) stockcharts.com HUI up 308% last 6 years (since Feb 2002) stockcharts.com Subsequently I compiled the corresponding on-balance inverse leverage to the POG during the past 5 years: Security....Leverage to US$ GOLD..........4.3 to 1 SILVER........6.7 to 1 HUI...........9.9 to 1 Going forward it’s my opinion the US$ will most likely be manipulated down another 10% with a view to make the US again competitive in world trade; reverse the trade deficit; and to reduce unemployment. I say "manipulated" because the economy needs a lower dollar to 'fuel' an improving economy and to reduce the Trade Deficit. Economic Ramifications are self-evident. In the event the dollar indeed dropped another 10% in the next few months (to about 78), and the above PM INVERSE LEVERAGE remains stable, it would project the following values for gold, silver and HUI. GOLD.....…....+43% >>>>>>>>>>>>>>>>>>> $996 SILVER........+67% >>>>>>>>>>>>>>>>>>>> $23 HUI.......….….+99% >>>>>>>>>>>>>>>>>>>> 708 IMO the above is feasible before y/e 2007. Not a recommendation to buy or sell anything. DYODD --------------------------------------------------------------------------------

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