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

To: LLCF who wrote (52683)	5/13/2000 9:49:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 116915

I believe that as the rise in oil import prices suck vitality out of our economy which I already believe is already headed into recession [from it's own weight], In essence, oil price rises are accomplishing what repeated Fed hikes haven't, namely a slowing of the US economy? I think you should call AG and tell him this. In my perspective, I think he still believes that the US economy is showing hyperstrength, boosted by increasing productivity, and efficiency among all economic sectors. High growth is not necessarily bad, so long as expected pricing pressures are matched by improving productivity that compensates. Higher wages for higher productivity are a natural and normal compensatory exchange. With greater productivity comes greater ability to pay higher energy costs and this is what OPEC is counting on. Howver, the rest of the world is not nearly as productive as we currently are and that is why their currencies are suffering thus. This goes back to a debate that occured on this thread months ago about the Euro and whether it would be a threat to the US dollar. I argued clearly not.... at least not until the Euro reflects the unified economic and political will and efficiency of the member nations. And I don't think AG factors in externalities like energy prices to the extent that you believe he does. But he clearly is concerned about raising wage costs and the tight labor markets. This is clearly a result of public market failure (since the government dictates how many immigrant workers are permitted into the US). And increasing the money supply is not going to save gold. It didn't help gold in the pre-Y2K run-up either when the Fed boosted reserves and added liquidity. What would save gold would be the perception that US productivity gains have peaked and that pricing pressures have not. That would be bad for the dollar and likely good for gold. However, I opine that US productivity gains are just beginning. Technology will to increase our ability to conduct business to the extent that human capabilities permit (unless we start working 3 shifts for each and every job in order to keep pace with the global market for our goods). Regards, Ron