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Politics : Dutch Central Bank Sale Announcement Imminent?
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To: Broken_Clock who wrote (1079)9/18/1998 9:20:00 PM
From: sea_urchin  Read Replies (2) of 81702
 
Payaya : Sorry, but I can't see how all that leads to an increase in the POG.

Protracted turmoil in Asia is destructive to those economies and only indirectly destructive to the economy of the US. For POG to go up, and stay up, we need continued weakness in the $US preferably with inflation either in the US or globally. What we are looking at is a destruction of assets globally leading to deflation. For this reason, until Asia and Brazil etc recovers one has to believe that the present weakness in the dollar (strength in the yen etc) is cosmetic and the result of manipulation.

The "anti-deflationary", bailout measure proposed by the WhiteHouse today is is the advancement by the US Treasury of funds to the IMF. For whatever reason, this was blocked by the Republican majority in Congress. (I have just seen it on CNN!) As you know, Greenspan did not feel it was necessary to lower US interest rates in response to the Asian crisis and fall in global stockmarkets. Furthermore, the bull market in US bonds continues unabated. This signifies continued confidence in the dollar --- despite the weakness in the currency and the low, getting lower, interest rates.
digisys.net

In my mind, the main reason why the gold price and gold shares went up lately is because of the perception of cheapness when gold was $270 and XAU was 50. This led to short covering. I'm not sure if gold at $300 is still perceived to be cheap. That's why I'm studying the trendlines of gold and gold shares like a hawk so that I can be sure that any breakout is for real.
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