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

To: munsters who wrote (310)	8/6/1999 1:50:00 PM
From: ahhaha	Read Replies (1) \| Respond to of 587

FED won't let rates rise enough to hurt prosperity and so gold will rise. The rate of growth of GNP isn't all that important. The efficiency of the growth is. Over time nominal and real GNP diverge when efficiency falls. Again, it is the FED who keeps nominal GNP rising by supplying excess reserves at the margin over time. As long as they do this gold will rise. It seems that rising rates would imply falling gold, but the FED doesn't let rates rise as fast as the market would take them which would impact gold price negatively. The FED uses gold price as a policy determinant in an inverse way, but they wouldn't let rates rise because inflation and gold were rising. They raise rates and sit until the economy becomes inefficient at the new rate as evidenced by rising rate of inflation. GNP may be slowing, flat, or negative during a period of inflation. FED's first priority is the propping up of prosperity, not the reduction of inflation. If that were not so, then what are they doing now? Propping props prices and so gold rises while rates rise. Gold price is mostly driven by imagination. There is no reason that the world's experts can imagine that price of gold should rise. They look everywhere for one and can't find it. This becomes mass psychology and mass expectation. Few experts comprehend what I wrote in the above paragraph since they believe that the rate of inflation is only a matter of FED setting the right interest rate. Most believe that at any time FED has set the right rate. I have implied above that they never set it right. They always err on the side of ease during expansions because they know we the people are no good and need a little boost. It's their Congress-given job to promote the general welfare rolls. With the mass psychology primed by expertism comes a prejudice against gold. As gold price slowly rises all those expected sellers decide little by little not to sell. The cbs decide to wait. None of this is made public. It would be heresy and subject them to ridicule if they were to admit what they were doing. So the demand supply situation profoundly changes silently in psychological expectation. It is this change in imagination, what X believes Y is believing, which sets up the public phase of price appreciation.