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Gold/Mining/Energy : Gold Price Monitor

GDXJ 114.64

+1.2%

Dec 17 4:00 PM EST

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To: Bobby Yellin who wrote (4588)	12/21/1997 6:34:00 PM
From: Gabriela Neri	Read Replies (1) of 116815

The long bond will go lower. Lets take this phrase and think about the logic. Right now, 2 years yield about 5.65%. Thirty years yield 5.90% - a difference of .25%. HMMMM!! Why bother going into a 30 year treasury at this point in time when the pickup in yield is but a scant .25% versus the safety and security of a 2 year note, with little if any capital risk. For the long bond bond to go much lower, if at all lower, then one has to be thinking of a fed rate cut, its as simple as that, because long bond yields aint going to go through 2 year yields unless we have a recession, and I dont think that is in the cards quite so fast. (I am talking in the next six months) I find it hard to believe that our economy can go from a 4.5% rate of growth to recession quite so fast. Therefore, the long bond will go lower really says the fed will cut rates at this moment. I dont buy it.

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