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Gold/Mining/Energy : Gold Price Monitor
GDXJ 96.88+0.9%4:00 PM EST
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To: Ahda who wrote (29558)3/8/1999 12:21:00 PM
From: Hawkmoon  Read Replies (1) of 116762
 
Darleen,

Depends on your perspective. Are we inflationary or are they deflationary?

Or are their devalued currencies inflationary while our stronger dollar is deflationary because our cost of basic raw materials and commodity manufactured goods continue to decline.

Until there is a clear sign of stronger demand from Asian economies that can soak up this excess global production capacity, or a cut in that production, prices will continue to fall or hold current levels.

The Fed is trying to avoid the collapse and destruction of capacity since it will have to rebuilt later on. It would rather attempt to increase demand and consumer confidence in those economies that are stricken by a crisis of confidence that keeps people saving money instead of spending it.

Its a big cycle, with a number of interconnections that not even the high faluting economists really understand fully. I just try to understand the fundamentals and base my decisions on that.

Fundamentals like, "are people buying goods and taking on debt to purchase items or are they saving the money because they are afraid of losing their jobs".

Or "can we boost demand to previous levels in order to soak up the manufacturing capacity that was built to meet that previous demand"?

Or "can the oil producing nations get their act together and cut production in such a way that basic prices for energy increase and show up in the CPI/PPI figures"

Take care.

Regards,

Ron
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