ZINC The base metal. News and Views. Symbol Zn Message Board

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Gold/Mining/Energy : ZINC The base metal. News and Views. Symbol Zn

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To: Claude Cormier who wrote (129)	2/25/1999 5:01:00 PM
From: Ray Hughes	Read Replies (1) of 3270

Claude: GIGO - garbage in, garbage out has always been a problem in modeling. One's forecasts are no better than underlying economic assumptions. One takes a stance, based on intelligent reading of economic probability, and wins or loses. Our intelligence is that Asian economies are not crashing, Europe is growing grudgingly and the USA exhibits sufficient growth to be of concern to Greenspan. Hence, I think the biggest risk is not of recession but from stronger global growth that will lead the US Fed to snug up credit late in 1999. That is what is gnawing at the Dow this week. This can be measured; track the pace of injection of Fed Funds through daily Repos to see if, and when, the Fed tightens credit. The Fed would likely go slowly in order not to de-rail a fragile Asian recovery. Plus, the cause for tightening would be rising base materials and labour prices. Hence, you and I would likely first enjoy the beginnings of a zinc bull market and receive a sell signal long before Fed tightening clamps down on zinc prices. Hedge Y2K with silver plays. RH

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