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Gold/Mining/Energy : Newmont Mining(NEM) & Newmont Gold(NGC) -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (293)	7/23/1999 4:05:00 PM
From: ahhaha	Read Replies (2) \| Respond to of 587

Buying puts is an extremely poor way to hedge. The POG has to go down so far that the puts won't protect against Chap 11. You don't buy puts after an extended down side. They're fat with premium which evaporates on the first short covering rally. The height of it is to suffer through all this down side and when the dollar starts hitting the skids, to venture on a bet that psychological bs causing the downside can overcome what the dollar weakness would do. This demonstrates my repeated contention that mining companies and the talent they can buy haven't the slightest clue about the subtle macro forces now moving in favor of gold. This isn't surprising. Greenspan gave no indication of such understanding yesterday either. In fact, he demonstrated neither he nor anyone else associated with the FED understands the intrinsic machinery. What did Pogo say? "we have seen the enemy and they is us". Greenspan's argument turns on an assumption of accelerating productivity, yet he claims productivity acceleration is shown by, and only by, wage constraint in face of stock market multiple expansion. This is petitio principii. What is acceleration? According to him it is a movement from an average of 1% during the '80s to an average of 2 - 2 1/2% currently. This has allegedly occurred because WIN95 is such a productivity enhancement. This befuddled old man is Chairman? He belongs with Friedman in the zoo right next to the dog-eared boy. These guys think they have it solved, and again, yet Greenspan stated the future is opaque and that is upon what preemptive policy is based. The only acceleration I see is in inflation and the dollar is going to make the horrendous inflation the FED has enabled all too evident. Don't expect the mining companies or 'Bugs or for that matter, Harvard economists, and certainly not Fed board members, to acknowledge this. The FED has adapted to a creeping inflation which they assume will not creep any faster, but it is they who have provided the fuel that causes the motor to race and the clutch to burn. In similar blind fashion the experts at mining companies can only see endless sales and that means more supply and to them that means lower prices. They were taught that price is determined at the margin, not at the total, but that was just Harvard which isn't applicable to the real world unless you have something important to say. So they believe what Greenspan is saying and they buy puts at the bottom. Is this why NEM got new management? It is likely since corporate management is like a slot machine. Most of the time they lose. They can't stay the course because they have no principle in which to believe. Just like Friedman and Greenspan. Loose cannons all.