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To: yard_man who wrote (103031)	5/17/2001 5:24:06 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

yes, the gold carry has become a great deal riskier and less profitable, as the narrowing spread between the lease rate and short term rates on riskless paper has eaten away the contango, i.e. the opportunity cost of holding gold has fallen drastically. you can observe this phenomenon in the narrowing contango in the gold futures market, which suggests that there is a near term supply tightness. and the long bond is worrying about rising inflation pressures....da boyz don't watch the bogus BLS CPI...if anything they may watch the median CPI of the St. Louis Fed, which is rising inexorably since its bottom in '99. the yield spread between TIPS and the long bond is the teller of the tale. it is still quite small, but its up from a low of 140 bps. to 220 bps. now. and stocks never make sense.