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

To: Hawkmoon who wrote (38256)	8/3/1999 11:39:00 PM
From: Rarebird	Read Replies (1) \| Respond to of 116766

Gold is a Currency and Investment of last resort. The US Stock Market and Bond Market are falling rapidly. Inflation is Rising! Who in their right mind would invest in the long Bond right now when its headed to at least 7%? What makes you think this is a correction? This is the beginning of a MAJOR MAJOR BEAR Market in US Stocks and Bonds. The US Dollar Index is dying a slow death even with the BOJ selling Yen! The CB's hands are almost tied and they know it. Their in a box here. Damned whatever they do and they know it. Samuel Beckett called it the " Endgame." Checkmate. < Those who hold gold would be seeking to raise cash by selling anything of relative value...> Gold is the Most Reliable Currency and Ultimate Storehouse of Value, especially in times of Financial Crisis. Need I remind you how strongly Gold rallied when the S@L Crisis first became known and a few bank failures first hit the newswires? When an economy contracts as inflation rises, the stock and bond markets decline in tandem and investors switch their assets into Gold. Investors then Demand More Gold! < I can theorize a complete collapse of overseas economies and a huge flight to quality for foreign capital into US t-bills > That was last year's story. This year the story is ever increasing Inflation, which erodes the value of the dollar. To make a case against Gold, you need to argue on behalf of a strong Stock or Bond market. Foreign capital is not taking flight into t-bills this time with the outrageous trade deficit the US is carrying and the prospect of much higher inflation down the road. The only big negative for Gold here is higher short term interest rates. Raising the Discount Rate Aggressively is Poison for the XAU. But this can be counter-balanced somewhat by the extent of the acceleration of the Inflation Rate. When it comes to Currencies, it's all a confidence game. Gold is a perceived value that comes into great demand when the US Stock and Bond Markets both become unattractive investments simultaneously. Inflation has always been the Great Killer of the Financial Markets. You can blame this next Bull Market in Gold on Mr. Softie Himself, Your Man Greenspan. It's too late. As a CB, it was his job to kill Inflation before it resurfaced. But he had other priorities like bailing out LTCM. Now he will pay the piper. Just you watch how most of the recent wealth created in financial assets gets transferred into Gold. Love, they say, is Blind. Wake up! This Bull is Dead!