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

To: jrhana who wrote (19599)	9/7/2003 9:11:01 PM
From: Little Joe	Read Replies (2) \| Respond to of 39344

This was discussed by Faber and Jimmy Rogers on Puplava's radio show. They pointed out that America of today is not like the America of 1929. There is much more debt and currency is over valued. They feel that we are more likely to see an Argentina type of situation. In that situation there is inflation measured in the local currency but not in other strong currencies or gold. They point out that you still have deflation but that the local currency does not reflect this. For example, assuming that gold is trading at 1K per ounce at the beginning of an inflationary period. You might have a building worth 10K or 5 oz of gold today that inflates in terms of USD in the future to 100K but in terms of gold it might only take 5 oz. of gold to purchase. So in terms of local currency you have inflation but in terms of gold there is deflation since it only takes 1/2 as much gold to buy the property. When this has happened in other countries in the past, the stock markets of those countries appreciated due the inflation of the local currency, but in terms of gold or other stable currencies the assets appeared to be deflating. As you know I have been saying that my indicators are both bullishon the stock market and the POG and was wondering how this could be. I think they answered my question today. I am more convinced than ever that we will see raging inflation. Little joe

To: jrhana who wrote (19599)	9/8/2003 8:42:50 AM
From: austrieconomist	Read Replies (1) \| Respond to of 39344

"Gurus on U.S. stocks"/Hussman on PM stocks. JR, either I (1) am not smart enough or (2) don't have the time, or (3) both, to figure out when the world of investors will see that the emperor has no clothes and will begin selling their U.S. stocks in earnest. Fortunately, I don't believe that I need that innate skill if there are those that possess it and share that knowledge. In the case of Hussman it is free. Stack, Russell, Ned Davis, and Lowry's are all subscription but if you pay attention, such as to this post, you can get glimpses of what they are all thinking. They all think that the U.S. market is overvalued but that the universe of investors is willing to continue to bid up prices, for whatever reasons. Hussman does not usually opine on PM stocks so I took note of his post this week: "In gold, however, we took last week's strength as an opportunity to liquidate most of our holdings in precious metals stocks. This is not a forecast regarding the direction of precious metals - indeed, the currency situation may be supportive of them. However, at present, we simply don't have enough evidence to override the less favorable Market Climate for precious metals that has now emerged. The article Going for the Gold includes a relevant, though somewhat simplified, set of considerations behind our current stance. In short, the potential for turmoil in the currency markets is a bullish argument for gold, but this potential isn't sufficient for us to take gold market risk against other conditions we currently observe, or to sidestep the opportunity to take profits on very strong prices. As usual, we try to replace lower ranked holdings on short-term strength, and to buy higher ranked candidates on on short-term weakness."