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Gold/Mining/Energy : Gold Price Monitor

GDXJ 121.17

-7.0%

Feb 5 4:00 PM EST

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To: Mark Bartlett who wrote (7568)	2/15/1998 4:10:00 PM
From: mark warburton	Read Replies (2) of 116972

Mark Bartlett, I would agree with your interpretation of the DOW being quite lofty. I do not pretend to ever no what is hapening but hindsight is 20-20. If you picture yourself in the future and look back at this time in history I think you will see what just occurred not even 10 years ago. In the mid 80's the majority of Boomers came of age for real estate. Giant demand outstripped supply, you get the hustlers on TV telling everyone to buy to or three and flip. In actual fact they create a bubble that will burst. The boomers learned their lesson in real-estate. Not too many people buying to or three and flipping a month down the road. The boomers are now of age for Retirement planning RRSP's and the US k400 plans etc. etc. THey are told repeatedly the only way to get better then average returns is in the market buy low, high, doesn't matter you will always do better. They know no better. These huge capital inflows can not be held down as the current demand for stocks exceeds supply. Look at the IPO markets over the last few years totally ridiculous but reality. Inflows of cash to US dollars with all these countries wanting to hold US debt instead of something concrete. The market for US debt is also shrinking as the US gets its house in order and balances the budget creating smaller amounts of treasuries for sale with over demand. Two fold creating higher US dollar and low interest rates. I wouldn't lend any money to the US government for 30 years for under 6%. That may be irrational exuberance to the extreme but as long as that supply of money continues to pour in to these markets prices will go higher, US dollar higher and bond yields lower. When the bubble does burst will the public be so confident or will they again learn their lessons. "When the ducks come squackin, Feed Em." A couple weeks back on NBR the reporter mentioned POG at 280 is the median price where half the companies produce at over and under that price. Will POG go lower Yah maybe but not for any real extend time period. Half the worlds production will cease and demand would increase further. Buffet, Munk and many others know what to do. They don't sell you tapes for 4 installments with play by play instructions. They accumulate wealth at discounts. IMHO buy the metals, and Real Estate after all they are not going to be able to make any more. In the future Oil but the arabs are still in a big card game holding four aces and afraid to bet. Sorry for ramblin mark

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