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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Square_Dealings who wrote (30204)	2/16/2002 10:58:53 AM
From: whydididothat	Respond to of 52237

The physics of the gold and dollar pricing are more complicated than just about anything I've seen. So far it has been easier for me to accept prices as, "what it is", then to think about what is happening on the atomic level. Still, I have a nagging need to understand. With that said, your following comment went totally over my head: <Open interest is important also. Commercials sell to the public by establishing shorts and then delivering against those contracts. If its funds taking the other side of the trade then I think its a good sign since gold bulls will need the general public to get invested in gold and eventually take delivery.> If you have time to elaborate, please do. Also, I'm wondering if you have read Hussman's paper about gold pricing? hussman.net He states that the POG increases when the POG in foreign currency increases (with worldwide inflation) and/or when the value of the US dollar declines. He goes on to say that the value of the US dollar decreases with decreases in long-term "real" interest rates (long-term interest rates - inflation). So, worldwide or US inflation and/or falling long-term treasury yields should put upward pressure on the POG. Seems we've had falling treasury yields (past tense) but no inflation. Perhaps the POG is a harbinger? A paradox is that one would presume to see deflation along with decreasing bond yields during an economic contraction. Hussman argues that,for various reasons, inflation and decreasing bond yields are not unusual in the early stages of a recession. I've seen seemingly contradictory opinions about the factors behind the POG. Do you agree with Hussman's thesis? I know that it is widely believed that the free market may not apply to the POG (is there some kind of gold "OPEC" out there?) There are interesting corollaries here. For example, I've been watching for the perfect SHORT setup for the US Dollar (BEGBX) and/or the 30 year US Bond (RYJUX). One wonders if this is even necessary if one is long gold? Sorry everyone about this cathartic post. Anyone who cares to chime in with information about gold, the US Dollar and/or bond yields or their favorite films and music -g, please do.