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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: mt_mike who wrote (52071)	5/25/2002 5:26:25 PM
From: t2	Read Replies (1) \| Respond to of 65232

The pullback in gold comes if the US$ index stays above approximately 112, the same level it hit back in September 2001. At this point, I think the gold move is done for the very short term simply because dollar might have found short term support. However, if the dollar drops below 112, we could see some serious short covering in gold stocks, fueling another leg up. IMHO, it mostly depends upon the dollar at this stage. Easing India/Pakistan tensions may lead to a weaker dollar as well. World tensions (outside USA) have in the past inflated the dollar although we have seen serious cracks in that theory in the last couple of months--worth watching.

To: mt_mike who wrote (52071)	5/26/2002 11:01:04 AM
From: Jim Willie CB	Read Replies (3) \| Respond to of 65232

MikeMtMan, you got it... gold vastly misunderstood I have a real good friend who believes gold has two veins only <g> 1. inflation hedge 2. world tension safehaven I have given the issue of gold factors a lot of thought and all I conclude each time is vast misunderstanding remember the starting premise: most Americans are ignorant and the ignorance is magnified when economics, finances, accounting, currency, and money are concerned try mentioning "zero real interest rates" at a dinner party or even with intelligent folks around the office I have done both, and get quizzical looks from smart people nevermind the reaction from bluecollar types, much funnier one guy responded with a comment about a woman's legs get this... I feel fortunate to know a number of smart people, with strong business backgrounds, with stronger educational background I spoke last week with a 60-yr old man with PhD Economics it was a casual conversation by a photocopy machine he was totally unaware of the real interest rate effect on gold he was aware however of the high trade debt effect on the dollar he wondered if world currencies compete against gold, with gold considered a currency at all he and I knew each other back in graduate school he was a professor in MBA program, I a student in Stat gradwork he is curious how a company can protect itself the discussion turned to holding off purchasing tiny companies, accepting cash only from clients and customers, and making few future commitments then another very bright fellow with PhD Public Policy trained in statistics and economics he regards gold as somewhat a nuisance irrelevance operating at the margin of world economic importance he and I have these fun bickers once per week he does not believe gold has any deflation hedge function back in Feb02 we began weekly discussions he has become more attentive now that gold has risen he admits not to understanding why, since no inflation evident I told him in March to watch all info regarding JPMorgan so he is now a scout, sending news stories my way I pointed out last week how JPM issued a gold stock sell reco, yet gold broke out to a 2-year high he found that extremely curious THESE ARE PHD'S !!! now dont get me wrong some of the stupidest people on earth have PhD degrees but at least most are schooled in theoretical factors the other extremely important issue I see is what I call the Political Givens about Currency most people believe the fiat USdollar is a worldwide given they think many strange thoughts: US$ is not subject to debate it is not to be challenged it has no alternative it will always be accepted it is the foundation upon which the world operates it is not the world's longest lasting fiat currency but they dont know that 45% of USTBond debt is held by foreigners that fact usually catches their attention I told a smart woman who manages an apartment building yesterday: "we have exported control of both the USdollar and US interest rates" she reacted with consternation we had discussed how she turned away from her large MSFT position last year I read a great quote yesterday about the US Federal Reserve it went... the rejection of capitalism is alive and well today, and it is underwritten by the largest, most powerful, and richest central planning establishment in the history of the world, which most people paradoxically see today as the instrument of capitalism (referring to the Federal Reserve). That misinterpretation may very well be the downfall of capitalism, and thus by extension, to freedom, at least as we know it today. When politicians talk of a new world order, maybe now you will know what they mean. It is about power, not freedom. ignorance is the root of the problem blind trust in financial system leaders and fatally flawed system itself gold will benefit from all the problems and attempts to correct them try bringing to the VPorch reactions concerning gold from very smart uneducated people with strong business experience a fascinating little project that I will continue it is utterly amazing, nay, alarming my brother had only a single word to say about gold/silver "intriguing" / jim