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Strategies & Market Trends : Precious Metals mutual funds (gold, silver, PGMs) -- Ignore unavailable to you. Want to Upgrade?

To: Larry S. who wrote (715)	3/13/2003 8:49:26 PM
From: Larry S.	Read Replies (1) \| Respond to of 972

Dan, et al, I didn't find anything in Barron's this past week concerning PMs. I guess they felt they had done enough the previous week or maybe they anticipated the fall this week. As I type this, the POG is down to about 332.50. The rise in lease rates this week make it clear that a significant fraction of the gold sold to bring the price down was leased gold. Lease rates jumped from record lows on Tuesday. Monday, after the price of gold rose a bit, the one-year lease rate dropped to 0.36 percent- amazing. CBs clearly pushed up the supply of gold for leasing. That rate must be below the rate that any CBer would accept as a way of making something on this asset occupying space in the basement. Therefore, it must be that the CBs were doing all they can to motivate the BBs to lease gold (and sell it) to keep the price down and maintain the illusion that inflation isn't a problem. But why?, if the deflation isn't the problem. I suspect, there is a recognition that interest rates must be kept low and the printing presses running to keep the economy above water and they don't want any concerns about inflation getting in the way. They obviously stimulated some takers and the POG dropped every day since and the one-year rate is now 0.51 percent, still a very low value but 40 percent above Monday's low. The GMI/POG ratio: On 03/06, the Barron's GMI was at 437.81, down from the previous week's 441.50. With the POG up at 350.75(02/28), the ratio was down at 1.25. The ratio a year previously was 1.25, essentially the same even though the GMI is much higher today. Cheers, Larry