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Gold/Mining/Energy : Barrick Gold (ABX)
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To: Jim McMannis who wrote (846)11/24/1998 4:31:00 PM
From: ahhaha  Read Replies (2) of 3558
 
FED pumping causes rates to fall because the supply of money exceeds that which is demanded at the margin. However, there are regimes where this isn't the case. We aren't in such a regime yet. We aren't because the money leaks out through the borders. It drives foreign economies because foreign producers are the low cost producers. FED is using this fact in an attempt to bail out Asia. The hope is that Asia will come along sufficiently before trouble breaks out here from the residual effects of excess money and the FED has to back off. This is all mistaken policy which I detailed in other threads during the summer.

One of the mistakes is that the pumping causes the stock market to race back up making it vulnerable to a panic over reaction. No doubt that cools the tendency for trouble to develop, but it also forces the FED to start pumping again. The financial swings provoke irrational behavior even though the tail doesn't wag the dog. The threat there is that Asia loses confidence and starts buying T-Bonds again which undermines their re-liquification process. The result is FED has to start pumping even more furiously. Eventually this causes gold to rise regardless of whether there is tangible evidence of inflation. You get monetary inflation, too many dollars chasing too few uninflated paper assets.

I'll bet the coin is better than your indications. I have sophisticated machinery that is 95% accurate. I've made piles with it. Now I avoid it at all costs. It's evil. I created this Frankenstein's Monster and I regret having done it. I can't even begin to explain why this is the case. I just want to be a regular investor who has to grin and bear the miserable swings against held positions. Taking money from markets is for fools. I want to earn a portion of capital growth only. I don't want to beat the market. The purpose of investment is to enable companies to make a better world. A pile of money doesn't make the world better for an individual though almost no one on the planet believes that.
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