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

To: Maurice Winn who wrote (33853)	5/18/2003 12:23:04 AM
From: smolejv@gmx.net	Read Replies (1) \| Respond to of 74559

>>For some things, such as gold, Euros and Kiwi$, it's true that people do want more US$ for the same quantity of gold, Euro, Kiwi$. But overall, they don't.<< Oh you mean Y and RMB? But they are not exactly crazy buying US goods - except TREZ and I dont know why they do it; RegZ dj

To: Maurice Winn who wrote (33853)	5/18/2003 12:26:59 AM
From: LLCF	Respond to of 74559

<<Demand for Uncle Al's $ is obviously huge and continuing to grow. >> Yes, at commensurately lower prices of course: quotes.ino.com Same as it ever was. DAK

To: Maurice Winn who wrote (33853)	5/18/2003 1:19:42 AM
From: TobagoJack	Read Replies (2) \| Respond to of 74559

Hello Maurice, a cyber pen-pal of Indian extraction, we will refer to him as Gumnam, apparently meaning Annonymous in Hindi, wrote the following thoughts that I had trouble responding to: Hello Jay …I … for the last 6 years and currently have been working … trading bonds and currencies. … Also the other thing that is bothering me is the example of GFI, drooy and all other South African gold producers. I have been long these "cowardly soldiers" from good levels but I saw them getting destroyed over the last few months. There are various reasons for it but essentially the price of Gold in SA Rand is less than what it used to be last yeareven when Gold was 270. The weaker dollar is completely offsetting the effect of higher commodity prices for all these PM producers. If you take this and extend the analogy, the same CAN and WILL happen to BHP, RIO and all commodity producers based outside USA , because their cost of producing will be denominated in their local currencies but the revenue is in USD. All non US commodity producers will suffer decliing margins. The companies based in US for example Newmont (wihch produces sizable production in US) are clear winners - USD cost and USD revenues. Why only Gold? The same phenomenon can happen to any exporter based in Asia or Australia or NZ who has sizable exports to US. They will not be able to increase the dollar price of their goods as fast as their currency appreciation. If the script plays the way you write it, and the way I understand it, equity markets all over the world will be doomed, atleast as long as USD continues its move down. In fact the only companies that might do well will be the one producing in US. ( I am talking about strictly commodity type producers, not the tech stocks and other wishful stocks). Even if commodity prices increase faster than USD depreciation, the argument will not change much because the foreign producers will not be able to benefit from full commodity price appreciation. So if you want to buy Gas producers, you want to do it with US producers rather than CanRoy - if US NG prices go up and CAD goes to 1.20, CanRoy will not provide the maximum bang for the buck as their costs will remain in CAD and revenues in USD. Chugs, Jay

To: Maurice Winn who wrote (33853)	5/18/2003 1:22:02 AM
From: TobagoJack	Read Replies (1) \| Respond to of 74559

... and I responded to Gumnam thus: ... I did not respond to your e-mail sooner because you brought up some difficult points that required some soul searching on my part. ... On your observations about GFI, DROOY, and other S.African gold miners (I have HMY, and also platinum diggers AngloPlat and Implat), I also note their cowardliness and thus uselessness. I changed horses recently, selling DROOY and buying AngloPlat Message 18897343 . I ameliorate the damage I suffer in S.Africa by doing this sort of thing on the US market Message 18916813 Once I decide to migrate to a certain market (meaning the currency migration decision has been made already), I generally try to do well in that equity market and stop concerning myself with the translation back into USD, my base currency. I generally keep some cash on hand in that currency, so as to average down or accumulate up my equity position in that market. This is now true of my exposure in Australia, Canada, Euro-space, and Japan. I believe all the currencies will grind against each other, each in turn taking a punishment, because all nations need a weak currency. On the CanRoys, I too have a concern about the relationship between revenue denomination, exchange rates, cost basis, but I also have a worry, or a bigger concern, about the diminishing yields of fixed income, the dilution of cash, and all manner of disasters in other sectors, currencies, and space. So, I must do something. I believe the potential rise of gas price will overwhelm any possible rise of CAD vs USD, and so I do CanRoys in an admittedly very conservative fashion, so far. energypulse.net energypulse.net Chugs, Jay