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

To: Rarebird who wrote (67259)	4/6/2001 11:43:43 PM
From: Crimson Ghost	Read Replies (1) \| Respond to of 116741

Rarebird: We may be close to A bottom in the markets, but agree that THE final bottom is not even close. The most scary thing right now though (and potentially hugely bullish for gold) is the rising possibility of defaults on money funds. PG&E apparently has considerable commercial outstanding that are owned by money funds. Money funds are supposed to be bedrocks of stability. If doubts as to their safety start to escalate the US financial and banking systems could come under massive stress, helping to send the greenback plunging. A collapsing NASADQ may not have done much for gold, but large scale defaults at money funds is a problem of a whole nother order of magnitude. The Fed is undoubtedly aware of the potential for trouble at money funds, and this will encourage them to cut rates still faster -- not exactly bearish for gold. Personally I plan to start moving assets out of regular money funds next week into government only funds. This is not the time to be reaching for yield. Modern economists often forget that one of the purposes of recessions and depressions in classical economics was to destroy unpayable debt. And the economy's debt burden going into this recession is much higher than ever before.