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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Art Bechhoefer who wrote (15091)	7/2/2002 11:12:48 PM
From: Frank Pembleton	Read Replies (2) \| Respond to of 36161

Art -- Jim Puplava wrote something I found to be very interesting - actually, it's something that will position this thread onto the right side of the curve for more than just a brief period of time. -- You'll also find a link for Jim Rogers web site "Raw Materials," it's worth the read, so please check it out. Regards, Frank P. an excerpt: Where Does The Investor Find Value? This brings me back to the game of musical chairs. What is safe? Where can investors find value? Where will the best returns be realized this year and the years ahead? Once again, I return to real assets. With governments depreciating their currencies, some faster than others, and with the myriad financial and political crises around the globe, the one asset class that stands out is “things” -- hard goods otherwise known as commodities. Will it be raw materials? As Jim Rogers has written in Why Raw Materials?, there have been bull markets in raw materials every 20-30 years. These bull markets begin when demand outstrips supply. Lower prices discourage investment and production of new resources. To quote Rogers, “Virtually no one has built an offshore rig, or opened a lead mine, or developed a sugar plantation during this period. Quite the opposite -- productive equipment has deteriorated, been cannibalized, or scrapped while other capacity has closed." 4 Will it be oil and energy? Despite shrinking supply, demand has continued to increase each year because of population growth and developing economies around the globe. Supply deficits have been made up from above-ground stockpiles. In the area of energy, we are getting the majority of our oil from wells discovered 40-50 years ago. Demand for oil has grown in 49 of the past 56 post-WWII years. 5 Almost all of that demand growth is occurring outside OECD countries. In the case of natural gas, the picture looks even brighter. Demand is expected to increase by 35 percent because of population growth and a major expansion in gas-fired power plants in the U.S.. And despite a recent drilling boom, there has been no major significant increase in the supply of natural gas. The failure of a major drilling boom to raise supply raises serious concerns over the next decade given the demand for increased electricity use. Will it be precious metals? In the case of hard metals such as silver and gold, the prospects look equally compelling. Mine production for silver and gold will start to decline in the next few years as the industry has failed to add to reserves. Low prices, consolidation, and mine closures will make it harder for gold and silver producers to keep up production. Today the majors are swallowing the mid-tiered companies and the juniors to replace their reserves. None of these acquisitions is doing anything to increase supply on a global basis. What makes this story more extraordinary is that monetary demand for metals hasn’t even entered into the equation outside of Japan where it is up over 100 percent from the previous year. Central bank sales, precious metals leasing, producer hedging, and investor dishoarding have covered most of these supply deficits. Prices have been declining because of inventory liquidation whether it is silver, gold, or energy resources. In order for this imbalance to be corrected, supplies will have to be increased. The only way that is going to be done is through higher prices. No company is going to stay in business or invest to expand production without the incentive of earning a profit. This means higher prices. We will get higher prices through the mechanism of the markets or we will get them through scarcity if governments try to intervene to inhibit rising prices through price controls. Either way, prices are going higher. financialsense.com

To: Art Bechhoefer who wrote (15091)	7/3/2002 12:48:23 AM
From: waverider	Read Replies (1) \| Respond to of 36161

Would you care to suggest these telcom/tech companies you think are really undervalued now AND are a good investment NOW...remembering that losing another 20-50% from here for any pick certainly will not be a good thing. wr

To: Art Bechhoefer who wrote (15091)	7/3/2002 10:37:03 AM
From: Jim Willie CB	Read Replies (2) \| Respond to of 36161

some basement shelters are appealing during tornadoes Art, you have consistently underestimated the potential trouble for our economy and our financial markets from the falling dollar it is not so much the lower dollar that is at issue it is the declining dollar with it comes a flight of necessary capital the actual exodus of capital causes an airpocket in US markets our economy requires large supplies of capital to feed its twin deficits: federal debt, trade gap in April we discussed this whole issue you dismissed any big negatives with a falling dollar now we see the major stock averages teetering near the precipice AND YOU STILL MINIMIZE THE DOLLAR'S EFFECTS !!! you are incredible, but typical among American investors I mean bright, well-read, not naive but far too immersed in American Arrogance next up: - rising interest rates WITHOUT economic recovery from USTBond selling by foreigners we are seeing a blowoff top in longbonds now from a return of price inflation next year - a return of inflation from falling dollar import prices will be rising from both finished goods and components we sent 60% of our mfg base to Asia during the 1980-2000 years the rest went to Mexico, taking advantage of NAFTA either foreigners allow prices to rise, or else suffer wiped out profit margins they have no alternative this concept is nowhere in our financial press now !!! - the falling dollar will accelerate downward via dollar carry trade short the dollar, buy either euros or gold (or 1/2 each) this will effectively reverse the 1990's two carry trades the yen carry trade and the gold carry trade futures contracts provides hyper-leverage to the process it is already increasing in usage - an acceleration of the DEFLATION process this will hit the financial markets relentlessly it will result in a major currency hotpotato effect nobody will want a strong currency during deflationary times this will lead ultimately to a currency crisis since the USdollar will gradually enter a FREEFALL - real estate has begun to show cracks, which will widen with more layoffs and higher interest rates come selling right now we are seeing the ultimate top effects in RE "lock in those low rates, and at any price" this will not last long and with it goes all manner of purchasing power instead of 2ndMortgage Equity Lines, we will see foreclosures - the benefits from a lower dollar will be TOTALLY vacant our customers abroad who we EXPECT to purchase our cheaper goods will be experiencing extreme economic duress the only place that might thrive is Europe but Europe is badly inefficient in converting capital to wealth their complexity might lead to distrust of stocks (e.g. Vivendi) Asia will enter a depression by next year who will purchase our computer systems? they are our biggest export do you see rosey forward guidance from... IBM, SUNW, CSCO, INTC, EMC, EXTR, etc ??? - the trade gap will NOT narrow from the lower dollar - the federal debt WILL widen from recession, wartime stance Slider suggests you think outside the box I suggest you take off the blinders you are not only caught in the box, but you are not looking forward, not assessing the dollar effect correctly the pablum fed by the US press is utter horseshit these days CPI, Productivity, Unemployment are all distorted figures now what we believe to be the world perception of the USA is widely different from how foreigners really perceive us and it is not flattering I expect the mutual fund industry to experience chaos I expect most safe havens to be attacked I expect FannyMae and FreddyMac to both go bankrupt and of course, the nobrainer, JPMorganChase will go bankrupt but most importantly, I expect a near dollar freefall but you probably would think a dollar freefall is good / jim