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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG
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From: Whitmore G.10/18/2008 11:39:39 PM
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I think Canada will lower interest rates on this coming Tuesday the 21st of October and since it is a commodity currency along with the Aussie dollar, who is also projected to continue it's aggressive rate cutting, the US dollar will finally start to trade down and gold strengthen. Currency thoughts.com says dollar move up is based on forced liquidations of hedge funds who are closing their books for their year end and not on capital flows which are negative for the US dollar and getting more so. Also deflation ,the likely future now, is bullish for gold just as the recent inflation was. The strength in the US dollar is also not justified by European manufacturing growth being lower then us the opposite is the case. Gold will continue to suffer if price stability is maintained but that would entail disinflation and continued slow price growth which is highly unlikely given the down force coming from the current house price cavitation. The price of gold performed well in the thirties deflationary market. It will again in the coming and current deflationary environment. The instability likely to come from failure of Lehman swap payments to settle, due in coming week,Tuesday, from those under writers on the hook for it and the auctioning of us dollars in Europe as a part of their bank rescue package will also weigh heavily on the US dollar the principle of which, let us not forget, is the source of all this mess.
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