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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Bobby Yellin who wrote (38155)	8/1/1999 2:00:00 PM
From: Ken Benes	Read Replies (1) \| Respond to of 116764

There are the rumblings of a change taking place. As a result, I think the cb's have altered their priorities somewhat. Prior to July they would not have minded if the price of gold sank below 250.00. Today, I believe their priorities have shifted to prevent gold from rising too far, too fast. To accomplish this, they are counting on the producers to come thru at the propitious time. I envision the following scenario. Gold rises above 280.00 an ounce, the bankers utilizing the IMF, Switzerland, and the US release statements with a lot of innuendo that for example: the swiss sale is imminent, the BOE is on track, and the IMF will sell only if the market is not disrupted. To coincide with the public releases, they will filter messages to the producers that the party is over and now is the chance to lock in prices by selling forward. To facilitate the forward sales, they will make whatever gold is required available. Do you have any doubt what is going to happen. The miners will be throwing everything at the market including their gold rolexes. They cannot help it, with a motto dig we must, it leaves little time for them to pick up a book on eco 101 and figure out their are other ways to make money than to break your back digging out gold that you are going to give away. While the miners are digging for gold, this board will go back to their time honored profession of digging for doom and gloom. Ken

To: Bobby Yellin who wrote (38155)	8/1/1999 3:43:00 PM
From: Crimson Ghost	Respond to of 116764

Bank analyst Charles Peabody -- a mainstream guy and not normally a proponent of "doom and gloom" -- says liquidity is insufficient to support financial sssets at anywhere near current prices. Projects a CRASH in financial service stocks this fall. Charles Peabody Mitchell Securites It's “Liquidity” - Stupid July 29, 1999 The concern has spread to Wall Street's senior executive suites. Douglas A. Warner, chairman and chief executive of big New York bank J.P. Morgan & Co., says even the bond market's most high-quality sectors are jittery. “Liquid markets like agencies, high-grade corporates and mortgage-backed securities are showing reliable indications of increased investor nervousness,” he says. Some indicators of investors' unwillingness to take on risk, he says, “are in uncharted territory.” - WSJ, 7/29/99, page C1. Over the past several weeks, I have explored the implications of a number of chart patterns, whether they be widening credit spreads, rising nominal rates, strengthening currencies, etc. The bottom line conclusion of all these charts was that there is insufficient liquidity to support U.S financial assets at current price levels. For the first time in many years, it seems that U.S. financial assets are getting competition for liquidity from other geographies and other asset classes. In short, the strengthening yen versus the U.S. dollar and the Euro (in the face of massive intervention) reflects, in part, capital flight back to Japan. The doubling of oil prices, the rise in real estate prices and the surge in the Journal of Commerce index are indicative of fund flows into hard assets (again at the expense of financial assets). The mirror image of these chart patterns can be found in the rise in nominal U.S. rates, concomitant with a widening of credit spreads. The growth in the U.S. has been a debt-induced, consumption-led expansion. However, if the liquidity that fueled the leverage on both the consumer and corporate sectors' balance sheets should draw increasing competition from other asset classes, then something has to give - either rates go a lot higher or the debt dependent expansion will slow. For the moment I am betting on the former. I, therefore, still expect that there will be a severe dislocation in interest-rate sensitive products that will cause significant earnings disappointments amongst the major multi-national banks, brokerage firms and mortgage-related equity securities. I also expect that the upcoming correction in financial stocks is most likely to occur in a more violent fashion (i.e., a crash scenario) than that of last fall. And while there may be a tradable bounce after the upcoming interest-rate related crash (just as there was after the capital markets led correction last fall), it should soon be greeted by a deteriorating credit quality cycle that will extend the long-term bear market in bank stocks. In short, after this next down leg, I suspect that more and more bank analysts and investors will come to the realization that a secular bear market that started in the spring/summer of 1998 is well under way.