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

To: ahhaha who wrote (402)	5/10/2000 2:56:00 PM
From: The Barracuda™	Respond to of 587

You nailed it. Did you hear the Walmart conference call? Scary if you don't like inflation. Still have my nem @ 17. gold hasn't done jack, but nem sure has.

To: ahhaha who wrote (402)	5/16/2000 4:25:00 PM
From: ahhaha	Read Replies (2) \| Respond to of 587

Federal Reserve said "increases in demand have remained in excess of even the rapid pace of productivity-driven gains in potential supply." The Fed added, "the committee is concerned that this disparity in the growth of demand and potential supply will continue, which could foster inflationary imbalances that would undermine the economy's outstanding performance." How could this be true? FED raises rates and economy accelerates? The only possible conclusion is that FED is not raising rates. The effective rate is DECLINING. How can that be? That can be through the mechanism of undermining the effect of rising interest rates by the supply of more money at the margin. FED is supplying excess reserves to the system so how could rates have any effect? Economy has enough time to go into a higher gear, a new mix of strategies to compensate for rising rates, such that expectations are not changed. Business decisions go ahead because the light at the end of the tunnel can be seen. It is necessary that the light at the end of the tunnel can't be seen. The free market gets there fast and there is no question among all the strategists that the big takedown projects won't pay, so they shut down their aspirations. Rates continue to rise until participants can't see through to the other side. How is FED supplying more money? The monetary base isn't growing. Ho ho ho ho. The base is growing at least at a solid 10% per annum. If "productivity-driven gains" can't keep pace with final demand, then base growth must be slowed. That hasn't happened in any previous FED target change. Outright injections and the ever-growing RP free float is nowhere near tight money and base growth will only accelerate from current levels if the FED persists with the charade they call interest rate targeting. They have to get base growth down and that's done by reducing current intervention. They will never stop interfering to some degree. They wouldn't want to put the free market in charge. Why, we'd be going back to 1907! Therefore absolutely nothing has been achieved by this latest action. Once the economy adapts to the new level of rates and it certainly will because FED must assure continued prosperity, the need to raise prices by business and labor will become more critical. Since this adaptation is not indefinitely possible, business will have to take greater risk in raising prices and similarly for labor. Necessarily the expectation on the return on invested capital falls as risk management is no longer optimized, taking profitability and productivity with it. This adds a reduction to the mitigating factors. The FED historically responds to this by pushing more money in to prevent the resulting marginally desperate demand for loanable funds from causing rates to rise above target. There is no greater pro-inflationary policy than gradualism through fixed rates.