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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (33851)	5/18/2003 1:07:19 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 74559

On other places to invest, I am thinking India now, Other than the apparent diffusing of tensions between India and Pakistan, are there any specifics signs that lead you to believe that India has reached the point where they are ready to restructure their economy, as well as their society? The POG, if it reaches that $2,000 level you seem to believe is possible, would certainly seem to benefit Indians, who are known hoarders of all things gold. And I don't understand why you seem ready to lighten up on AUD's. I might be wrong, but I thought Australia's currency did rather well when gold prices were up, given that is such a major industry there (sure won't help their other exports though)? As for Echelon, sure it can be circumvented if you have the right technology. But it's proven effective in uncovering some dirty dealing by our supposed "allies" in the past. And as for the Chinese being able to invest in retail gold, what that government giveth, they can taketh away, should it threaten global economic stability. Unlike many others, I don't subscribe to the belief that the US has sold or physically leased out its hoard of gold stored at Ft. Knox or the NY Fed. Were gold to rise to the levels you believe possible, I sense the pressure would be great to encourage sales of that gold. After all, the last time gold went hyperbolic, it was in an era of hyper-inflation ignited primarily by the oil embargo, we're in a situation where deflation is the risk, and a government seemingly unwilling to take the necessary stimulus actions to provide the "ounce of prevention" that might (knock on wood) prevent the "pound of cure" Japan will eventually face. If anything, the Fed and Bush administration need to induce inflation in a controlled manner. And I believe that's one of the factors that influenced the decision to overthrow Saddam. Removing a source of potential turmoil, as well as undercutting OPEC's ability to manipulate oil prices, works well to limit the oil-exporting Arab's ability to ignite a run on the dollar. And having US troops in the region doesn't hurt either. Also, for the price of gold to reach the levels you're opining of, it would effectively require a general loss of confidence in EVERYONE'S Fiat currencies. Effectively the market would be rebelling against every Central Bank on the planet, choosing gold over Fiat. And methinks the Central Bankers wouldn't take too kindly to that. And while the dollar has declined in recent months, it really seeing the Bush administration ceasing the subsidization of Europe and Japan, effectively using currency ratios just as they have to create protectionist barriers to US markets and spur domestic economic and job growth at their expense. This is indicated by the recent news that Japan is suffering even more rapid deflationary pressures, and negative growth. They are pushing on a string, while the US is effectively devaluing all of those dollar denominated debts held by foreigners by it's currency decline (dollar denominated debt held by Europeans just a couple of years ago is now worth 40% less when converted back to Euros). And while in decline thoughout the past year, Right now the USD would seem due for a relief rally: stockcharts.com And .93-95 would seem to provide some decent long-term support. futures.tradingcharts.com One thing I would say about "enemies being accumulated" is that those enemies would be cutting off their nose to spite their face, were they to attempt outright hostility towards us (even if not military). If anything, I believe the actions of the US over the past several years have laid the foundation for a recovery in the emerging markets, protected under a US umbrella of global order. If will be interesting to see if there is anything either of us are overlooking, or under/over emphasizing in our analysis. Take care Jay! Ron Hawk