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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: pogbull who wrote (5888)	9/9/2002 12:16:51 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

clip from Mauldin's message, as per gold Also, having been a bear on gold for many years, I suggested we would see gold begin to rise as the dollar dropped. In my view, gold is a "neutral" currency, and as the dollar weakens over the next few years, we will see a corresponding rise in gold. I do not view gold so much as an inflation hedge as a currency hedge. That is why I think gold can rise even in a deflationary environment. The recent rise in gold is not telling us that inflation is returning, but that the dollar is in jeopardy. How far the dollar drops is a looming question, and in much debate. I am of the current view that it will not drop too much against world currencies, as the problem is simply, "Where do you go?" As I will discuss below, the rest of the world is slowing down much faster than we are and Japan's government is committed to currency hari-kari. The picture is very cloudy. Gold may get a larger than normal boost simply because everything else looks so ugly. ME: I hate to cross with Mauldin, but must mention this the larger than normal boost in gold might come from partial abandonment of USTrez securities, since yields are pitifully low, and a falling dollar brings with it the risk of rising import prices the US economy bears a risk that no other world economy shares we can see inflation during a recession from our imports our vulnerability to a dollar decline is unprecedented we can see both the fundamental rising price inflation from imports, while at the same time rising interest rates from foreign bond selling this is the VICIOUS CYCLE which I recited all spring long / jim