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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Ruffian who wrote (4420)	12/5/2003 1:23:46 PM
From: Jim Willie CB	Respond to of 108622

a year ago supposed gold experts claimed gold was rising due to Middle East concerns then in Feb and March it was Iraqi concerns now they say gold is benefiting from the falling USDollar and general geopolitical concerns occasionally we read something about how low interest rates lead investors away from shorterm Treasurys I find most pundits and analysts alike are shallow in their understanding of why gold is rising, since it is due to a great many reasons one recently coming to the fore is Asian savings diversifying away from US$-denominated securities, which are very vulnerable to a US$ decline I spoke over TGvg with a retired Ohio banker for an hour he thought gold was ridiculous, since it offered no interest yield until we finished the discussion, when his eyes were opened I WAS UTTERLY ASTONISHED HOW LITTLE HE KNEW ABOUT ANYTHING IN THE FINANCIAL WORLD I stick with my reasons, and add one more 1. real rate of interest has been near zero since Oct2001 2. rise in foreign holdings of US assets increases our vulnerability to foreign abandonment 3. money supply increased over 40% since Jan 2001, close to 100% rise since 1991 4. return to federal deficits from recession and wartime economy, security spending 5. rising world tension, desire for safer safe haven, the geopolitical threat to peace 6. Glass-Steagal Law repeal now heightens risk of financial cluster failure in progress 7. world perception of American institutionalized dishonesty 8. likelihood of systemic banking shock waves from debt collapse and derivative chain reaction 9. reduction of USDollar usage as both store of value, banking reserve asset 10. sharp increase of savings across Asia in the form of gold 11. Islamic world is planning gold-centric international commerce, distancing from USDollar 12. Bank for International Settlements has targeted the US dollar for a corrective decline 13. reversal of miner hedges, end of gold leasing, reducing supply 14. dismantled mining supply apparatus, from systemic price below production 15. paradox: high gold price leads to higher demand, and high price leads to lower supply 16. trade tariff resumption discourages global trading village concept 17. USDollar correction to relieve the trade imbalance could result in a currency crisis 18. accelerating worldwide currency turbulence 19. European currencies offer more attractive alternatives to USDollar, with Swiss Franc leading 20. the calendar date Sept 11th marked the turning point for USDollar in two critical years 21. rising costs from entire energy complex (crude oil, natural gas, heating oil, gasoline) 22. commodity trend reversal has begun, the beginning of a new longterm trend 23. Kondratieff Winter is gathering speed and force 24. divergence toward deflationary credit-based economy, inflationary cash-based economy 25. the parallel between gold’s rise in the 1970’s and 2000’s has many components newest: 26. major gold producing nations are seeing production costs rise in dollar terms from rising currency, which has resulted in sharply declining profit margins, and may force mine property shutdowns / jim