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

To: Crimson Ghost who wrote (71409)	6/9/2001 10:04:55 PM
From: marek_wojna	Respond to of 116762

<< One key argument of the gold bears is that each major rally has been peaking at lower highs. POG hit $500 in 1987, $410 in 1993, $325 in the post Washington Agreement rally, and $295 last month. If gold can go over $300 in the next major rally -- thus beating the May peak -- a lot of shorts will get MIGHTY NERVOUS IMHO. >> Taking technicality into account you are 100% right. Hutch and Ken are right too. All I did is took demographics, mental stage of investors around the world, present internal and external debt of US, 10% of GATA claims, listen to the people around, found out how easy is to bring them to invest in gold right now (ordinary people, working class), real lack of investment opportunities around and put the puzzle together. I'm missing - is change of tune from media, common understanding how thin really the gold market is, how little is needed to change it overnight.

To: Crimson Ghost who wrote (71409)	6/10/2001 3:21:52 AM
From: marek_wojna	Respond to of 116762

'INFLATE OR DIE!' by James B. Stack 07:00 AM 06\|08\|2001 The Fed will do whatever it takes to stimulate the economy and stabilize the stock market. "Inflate or die!" In three simple words, that's the Federal Reserve's policy at this critical juncture. Alan Greenspan can't stabilize consumer confidence without stabilizing the stock market -- they are too indelibly linked today. Even after the bear market of the past year, stocks account for 44% of household financial assets. That's far higher than the peak during the Go-Go Fund years of the late 1960s, and over twice the level at the start of the past bull market in 1990. Bottom line, if consumer confidence continues to slide, then a deflationary Japan-style accident becomes possible. And fears are the Fed is running low on ammunition. The Fed is trying desperately to reinflate, and with MZM and M-3 money supply rising at double-digit rates, success seems guaranteed. Neither the Fed nor we may like the consequences down the road, but that's a story for a future issue. The near-term effect of a rapidly rising money supply is normally bullish for both the stock market and the U.S. economy. On May 15, the Federal Reserve cut the discount rate for the fifth time in 133 days. . . . [A] lot of historical perspective can be gleaned from fifth discount-rate cuts. Note from the top half of the table that this is only the eighth time in the Federal Reserve's 88-year history that officials have made five consecutive cuts. Only in the deflationary '30s did such easing fail to stimulate the stock market to healthy gains over the next 12 months. Most of the gains within six months -- with the exception of 1982 -- were anemic at best. Looking at the lower half of the table, you will note that, in most cases -- again with the exception of 1982 (and today) -- one reason for the anemic gains in the six months following a fifth rate cut was because the market had typically risen between the first and fifth cuts. Even in the deflationary accidents of the 1930s, the stock market climbed between the first and fifth cuts. Two of the weaker gains after the fifth cut (1971 and 1991) also followed two of the weaker gains between the first and fifth cut. What conclusions would we draw from this data? (1) The Fed is pulling out all the stops to add liquidity and stimulate the economy. Aggressive easings like this occur less than once a decade. (2) Without a deflationary accident or other unforeseen warning flags, the odds clearly favor higher stock prices over the next year. But don't expect gains to be spectacular. This is not 1982, when the S&P 500 P/E ratio was one-third of today's lofty level. (3) Simply because the stock market has declined between this year's first and fifth discount rate cuts doesn't mean the Federal Reserve has lost control. (4) If -- after the five cuts -- any of the major stock indices were to unexpectedly decline to new lows, it would be prudent to "batten down the hatches" and prepare for the worst. So what is Alan Greenspan's next step? Obviously, the answer is more of the same. The most important aspect of [the latest] rate cut was . . . the text that accompanied the move: "The Committee continues to believe . . . the risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future." In other words, if five rate cuts don't do the trick, don't rule out a sixth or seventh. The Federal Reserve is trying to give the impression that the door is wide open for further rate cuts. James B. Stack is the president of InvesTech Research, a Whitefish, Mont.-based advisory firm. A version of this article appeared in the firm's "Market Analyst" on May 25, 2001