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

To: Art Bechhoefer who wrote (28955)	3/3/2003 12:54:04 AM
From: c.hinton	Read Replies (1) \| Respond to of 36161

If one had invested in eurobonds and gold bullion at their bottom with interest and capital appreciation due to centralbank rate cuts, the respective gains would leave gold bullion only a very few percentage points ahead.if one took into account storage expence and higher trading commision rates for the gold the difference would be nill.Add in lower volitility for the euro and you have some very good reasons why gold is not the investment par exellence.When the european central bank decides it is time to inflate to make the euro more competitive and permitt the honoring of pension and health care promises then gold will truelly shine.A few years ago the idea of world CB initiating sycronized inflation was floated.That event would truelly make gold the only refuge.Of corse one can not invest in the equvilent of a euro mine.g

To: Art Bechhoefer who wrote (28955)	3/3/2003 2:19:45 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 36161

you hit a critical issue, Art it might be a little worse than you describe though the employment cost index rose rather sharply recently health care costs are up we have higher producer prices, as you cite but I conclude we have higher production costs generally - employment costs - producer prices - energy costs - shipping costs one more biggee, where the US is the most vulnerable as the dollar declines, materials and supplies rise in cost and Asian imports eventually rise in price both finished products and components almost everything made in the USA has foreign parts so the advantage of a lower dollar is offset by higher costs I believe this erases almost the entire US currency translation most Americans are just plain simpleton dumbshits when it comes to financial matters, economic issues they see the rising commodities prices, and applaud the return of inflation, a success for the Fed Reflation efforts how wrong could they be ??? we are seeing a rise in production costs, which will now lead to a further erosion in corporate profit margins already the chemical sector is complaining of rising production costs there is good inflation -- rising purchasing power, rising asset prices there is bad inflation -- rising product costs (against a backdrop of ZERO PRICING POWER) WE GOT BAD INFLATION, which wipes out profit margins A BIG BAD RECESSION IS COMING, which could worsen quickly the crude oil issue is a looming giant issue I expect retaliation by Islamic world in the form of demanding EUROS for OIL this will exacerbate our dollar problem, taking it to the next level, closer to a crisis I laugh when I hear of economist efforts, like Bergsten of the Institute for Intl Economic, where he implores that we seek a lower dollar these guys never point out the risks of a declining dollar they only cite the need for a lower dollar the dynamics of change will wreck havoc I havent pestered you recently last March-April, I believe you were expounding the benefits of a lower dollar e.g. Qualcomm Asian sales you cited specifically that our multi-nationals would benefit from favorable currency translations I warned that foreign economies would not in sufficiently strong condition to place and take delivery on orders from our US firms I also said that the US doesnt build and ship much of anything anyway and lastly, I said our import prices would be rising (commodities incl crude oil are almost all imported) did I get all these righton? where is the benefit to multi-nationals? you seem to be more aware now of the ravages of a declining dollar with higher production costs, which will kill profits there are no benefits to a declining dollar the world is too dependent on the US demand a declining dollar breeds a world economic recession / jim