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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (44175)	3/27/2000 11:48:00 PM
From: nihil	Respond to of 99985

Pretty hysterical gold bug stuff. The big problem today is preventing the gold holders (mostly central banks) from dumping their remaining gold and buying more dollars. The gold cartel (the central banks) have to conspire to prevent the banks from dumping all their gold. No one can imagine that the future dollar price of gold will increase, so holding gold is a mug's game that costs 4 per cent a year (or what ever the real interest rate is at the moment). The United States is the biggest sucker in this game. AG is a notorious gold bug, and Summers, who knows better than anyone that it is a mug's game, does not have a free hand to break the gold market by dumping US reserves. The major question is who would hold the 3 billion ounces of gold if the central banks gave it up. One answer is what the banks have started which is coining gold and slipping it coin by coin to the public at artificially supported prices. If the gold reserves were dumped, who would be foolish enough to hold it on the way down? Almost all overseas owners of dollars can find a wonderful place to "invest" their money. The rising price of longer term T-bonds will finally lead the more conservative to invest in underpriced, slow growth US stocks like GM and F. As long as the trade deficit grows and the old economy stocks maintain their profitability, there remains an opportunity for a Dow and NYSE boom. The NASDAQ 20 will continue to boom as long as their earnings continue to grow. The slow decline of gold and the growth of trade imbalances will continue to push the US stock market up. This will continue until the other countries finally decide to buy as many American-made goods as they sell to us.