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Gold/Mining/Energy : Gold Price Monitor

GDXJ 128.89

-8.7%

Feb 12 4:00 PM EST

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To: Mark Bartlett who wrote (24185)	12/12/1998 11:36:00 AM
From: Giraffe	Read Replies (2) of 116982

Thinking a lot about POO this morning ... tfc-charts.w2d.com cnnfn.com I'm not an economist but it would seem to be that if oil stays down at current levels or lower it will mean: - bigger cars will be more attractive cause gas is cheap - housing developments further out in the boonies become somewhat more attractive - manufacturing costs will get cheaper worldwide EXCEPT that ... - countries with excess labour and factory capacity - basically everywhere except the US - will benefit the most as they will be most able to take advantage of the cheap fuel/power which means that ... - US trade deficit will widen dramatically. - the US economy should do pretty well in the short term as consumer confidence will be strong. - US$ will weaken further and will be chasing an increasingly scarce labour force which leads to dramatically higher wages and even worse international competitiveness. As to whether the higher labour costs are enough to bring about inflation (in the face of the deflationary pressure of lower oil) I don't know. The other factor is that under the above scenario ultra cheap oil is not going to last too long as manufacturing world wide recovers. Anyone else thinking about how POO affects POG?

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