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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: austrieconomist who wrote (18597)	8/29/2003 8:46:12 AM
From: TheSlowLane	Respond to of 39344

Speaking of money creation, Mogambo Guru did a good piece on that the other day. Worth a look: "But now, tired of taking a back seat to the Treasury which is having all the fun, the Fed jumped back into the fray, and last week Total Fed Credit jumped by, and I hope you are sitting down for this, because I was not and now I have a big bump on the back of my head where I hit it when I passed out from the shock of reading such a number, $14 billion. The dollar sign in the front indicates that those are, yes, dollars. And the 14 billion tells you how many dollars. So, yes, putting it all together and summing up, it truly is $14 billion United States dollars, and it is not some optical illusion. Now I know that this doesn't seem like a lot, as those of you who have had the misfortune of requiring medical attention of any kind realize is only about a three-day stay in any hospital, but remember that this is the original high-powered money, which the starting place for that fractional-reserve multiplier, and so you need to multiply that $14 billion by almost a hundred to get the new multiplied total. When you do that, and I did, which explains why my eyes are comically rolling back in my head and trained attendants are applying the paddles from a cardiac resuscitation machine to my chest and shouting "Clear!" in my ear so loud that I am having trouble listening for the pizza delivery guy to ring the bell, it is $1.4 trillion. Trillion! In one freaking week! "Clear!" Zzzzttt!" 321gold.com

To: austrieconomist who wrote (18597)	8/29/2003 8:57:25 AM
From: Tommaso	Respond to of 39344

>>>MZM growth rate at 17.5% for two months is still indicative of Fed monetization activity.<<< A country that is determined to start a war can always do so, and a central bank that wants inflation knows how to get it. When it come to inflation hedges, I have never much enjoyed owning physical gold (the mining stocks are more fun) but compared with much real estate the managerial fees and trouble on gold are pretty low. I guess undeveloped land is better, but it takes instinct to choose the right land at the right price. My chief hedge remains energy, but as John Train said at least 20 years ago, "Depending on how bad a crisis gets, gold ranges between being the best answer and the only answer."

To: austrieconomist who wrote (18597)	8/29/2003 9:47:57 AM
From: russwinter	Read Replies (1) \| Respond to of 39344

Actually the BCA chart can be pulled from their site, the link is provided at the Epic Credit Bubble thread in my intro. That MZM growth just doesn't look sustainable, but the question is, does one anticipate it turning down or wait for it to turn down. I think the feedback will be rapid when it does. <My guess about six months, since that is the earliest impact on any economic statistic of a change in MZM.> I've looked over the history of this and I think it's a quarter not six months. That would take us through about the third quarter. This one will have a fast feedback into the employment market become of mortgage industry cutbacks (as Bensen mentioned in his piece) and start showing up about now in the numbers. <facilitation of the means to gold ownership should not be underestimated> A good point, as I do think the Chinese are probably driving this market (and energy, and food, and..) now more than is generally appreciated. Still this can be new era thinking that one needs to be careful of. New era thinking always looks for the greater fool, and once that mentality takes hold the game is really up. Also strong POG in itself will be a feedback to the markets (and Cs) that too much excess liquidity has been provided.

To: austrieconomist who wrote (18597)	8/29/2003 1:45:58 PM
From: russwinter	Respond to of 39344

Here's what I posted before on the refi relationship at least to retail sales. I think it looks like a quarter lag. The index peaked over 9000 in mid-June. Most recent is 2169. Message 19237036 On the liquidity mop up, I'm keying on the repo numbers. Today they are at an extremely high 35, so the Fed is still wildly aggressive. The big one of 15.0 expires next Thurs the 4th and it will be interesting to see how they replace that one. You can track this at bulland bearwise.com, also listed on the epic list. bullandbearwise.com I'd key on drops below 23b to signal some short term backing off of "liquidity injections". They did let it drop to 14.75b on Aug.8 and the markets immediately started to swoon, and then quickly pumped it back up to 37b on 8/15. From my tracking the markets really seem responsive to the ebbs and flows of repo activity. That's alot of heroin slopping around, just goosing markets (including gold) in one big feel good festival with party hats and all, but not doing much that's useful, other than creating echo bubbles about everywhere. In fact to me, it looks like the participants are inebriated enough that it's gone beyond lamp shades on heads. In fact, some have been spotted in the bathroom trying to rip the toilets off the walls.

To: austrieconomist who wrote (18597)	8/29/2003 11:08:40 PM
From: Silver Super Bull	Respond to of 39344

AE, I know that many people believe that gold's recent advance is caused by the rather heady monetary growth. However, I don't necessarily believe this is the main driver of the gold price. In fact, it may not be one at all. I base this on the observation that for a long time (I would argue since 1987) there has been strong and near-continual growth in the monetary supply, not to mention the unbelievable growth in the overall credit marketplace. Yet gold was actually at $500 at the end of 1987. Here we are, a mere 16 years later, and many on this thread are wondering if gold can maintain or advance from the $375 level. DB