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

To: Rarebird who wrote (38570)	8/7/1999 10:11:00 PM
From: Zardoz	Read Replies (1) \| Respond to of 116763

The deteriorating fundamentals that lie behind the most recent erosion in the value of the dollar, is a wake up call for the World to put their resources behind the most stable currency in the World, GOLD The stability of a commodity is based on the stability of the currencies that are in direct opposition of the commodity. In this case the US Dollar is NOT in opposition to the Price of GOLD. It is the monetary excesses that are being ween {look in dictionary}. And as such, inflation that was masked by M2 rate increases shows when the same M2 rates decreases. But nowhere is their more inflation now then there was last Aug. Removal of marginal M2 excess, causes liquidity to dry up. And as a bubble starts to collapse on it's own weight, the markets start to decrease. In the following chart you'll see a red, and blue vertical line {and a green arrow} Blue line is Nov 2 1998. This was the first sign that the Fed was changing over to a tightening bias. The Red line is when the FED actually started to tighten on Jan 11/99 at a VERY rapid pace.. members.home.net The interesting thing is that during this M2 rate correction from Jan 11/99 the US Dollar actually appreciated. This suggests that the problems in Asia and Europe was really worse then stated. Now that the M2 excesses are being mooted, the reaction of a decreasing dollar shows in the form of the DXY decrease. decisionpoint.com members.home.net So why is the DOW not correcting like the Nasdaq & S&P500? During the market correction of Aug 98, the hedge funds jumped in and purchased SWAPS, SWAPOTIONS, and FORWARDS on the DOW stocks, and not the NASDAQ & S&P 500 equity, under the premise that the Dow would be less likely to be effected by higher short term yields. You might say why would they do so IN Aug 98... If we go back to Oct 87, we'll see that during the crash, the Fed {who was in charge????} quickly jumped from a tightening M2 rate flow to a loose monetary policy. This Caused the DOW to quickly apprecate, and the remaining markets slowly. So when the Asia problems occurred they KNEW Greenspan would loosen, and thus this would drive up the DOW... So When in May 17/99 the Dow appeared peaked, they started to short their positions against their long swaps, and forwards. Being contracts that can't be closed, those that must delivered those securities on their due date, will by and large HAVE to BUY. This is what is supporting the DOW. I'll leave you with this while I go eat: So why isn't gold rising while M2 and the US Dollar are falling? Hutch PS: Rumours of Tiger have been going around since late Nov 98, Romours of Quantum have been going around since the Russian debacle. Remember when LTCM fell apart, and how the press seemed the last to know. Well now the press are trying to be the first. Most rumours have some bases in truth, but the reasons for a funds problems need not be one that will collapse a fund. CNBC has been making comments about Tiger for well over a month now. But like always, they don't tell to much. I'm pretty sure that if you go back at least one month you'll hear of at least one person posting it here.