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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (209594)	12/14/2002 10:32:35 AM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 436258

Were did you read about the EUR and Gold ? you mean this piece? Why Gold is Going Up Even More There may be more than meets the eye with the recent change of the Secretary of the Treasury. John Snow is an influential member of the Business Roundtable. They have openly advocated a weaker dollar. Former Secretary O'Neill more or less favored a strong dollar. While the major emphasis of Bush's appointment is to get someone who will argue for his tax cuts and other policies, a weaker dollar is also the prescription that the Fed (see Bernanke's speech) advocates as well. If the administration wanted a strong dollar, they could have found someone who believed as much who also would forcefully argue for tax cuts. My long standing view is that gold is a currency, nothing more or less, and thus floats in concert with whatever the relative value of any given currency is. Gold has dramatically risen in terms of yen as the yen has dropped 50% against the dollar. As the dollar begins to drop, we see gold rise. I became a gold bull early this year as I predicted the drop in the dollar against the euro. I suggested the dollar and the euro would be at parity at the end of 2002. We are now slightly past that point. Given the Fed desire for a lower dollar, our trade deficits, a business desire for a lower dollar and now even a willingness at Treasury for the dollar to decline, it is likely the dollar will drop even more against the euro. Every time we have approached $320 gold in the past, there has been selling on the part of central banks which has knocked it back. Today it seems that those sell orders have been lifted. Are central banks now gold bugs? Hardly. But they are money managers, and are obligated to try and get the best returns for their reserves as possible. My guess is they still think of gold as a barbarous relic. They still want to sell. But the signals from the Fed, the appointment of a man at Treasury who likely will let the dollar drift and the trade deficit all suggest to them they can get more for their gold if they sell later. They read the charts, and the charts say wait. The key for the price of gold, in my opinion, is the price of the euro in terms of dollars. In a preview of my 2003 forecast, I will give you my likely prediction on the euro today: I think the euro and dollar will approach the original levels of the euro when it was introduced - $1.17 or so. That is another 15-17% from here, and could easily take gold to $380. Ian McAvity, one of my favorite gold curmudgeons, and chartist par excellence, points out that we are now in a very important point in the technical charts of gold. If we move up over the current area, the next "resistance" is at the $380 level, which not coincidentally corresponds to a 15% or so drop in the dollar against the euro. (You can get McAvity's gold charts, plus his 24 page 2003 preview, for $49 with a four month subscription to his excellent technical letter. Email imcavity@yahoo.com for details.) I could launch into why the dollar dropping will be harder than it looks, why the Fed minutes confirm my opinion that we are in a Secular Bear Market and the recent rally is a bear trap, but it's time to go home, so I will quit here. I will save a few bullets for the 2003 preview. I can confidently predict, however, that sushi and sake are in my very near term future. Meet Me in Puerto Vallarta, and a Job Opportunity I am looking for an editor/writer/researcher/assistant/productivity enhancer. Writing and editing skills are important (witness the mistakes in this letter), as are intellectual abilities, but whoever I hire will be researching and doing a little bit of everything. I assume you will have solid technical computer and internet abilities and love to work long hours while you are underpaid (just like all my staff). This is not glamorous, but will be fun and should be interesting. You will need to work out of my office (Fort Worth) and therefore live in the Dallas/Fort Worth area. Send me your resume if you are interested. Next week is a lost cause for personal productivity. I have to go back to school in Dallas to study for yet another securities license. Two days of cramming on arcane details, one day of desperate study and then the test on Thursday. I will get to have dinner with David Tice and Marshall Auerbach of the Prudent Bear Fund on Monday, so there will be some fun as well. (Boy, have they been on a roll!) I am going to take a needed week off after Christmas and go to Puerto Vallarta, Mexico, with my wife. Besides the all important time with my wife (I have promised no business!), I will sit in the sun, read books, play golf and contemplate the future. I will then come home and write my annual predictions. Maybe a few margaritas and long talks with my wife will make the outlook more promising than merely Muddle Through. If you are in the area, and want to play some golf, I can get a day pass to meet you at the Marina Golf Course. Discussing the markets between shots is not a violation of the no business zone. I love this time of year. We will get all the kids back home for Christmas (all seven!), and my wife really knows how to decorate a home to make it feel special. I hope you are enjoying the time as well, and remember that there is no deflation in the value of time spent with family and friends. Even a central bank cannot destroy love. They do have limits. Your raw fish eating and hot sake drinking analyst,