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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: UnBelievable who wrote (88257)	12/24/2003 12:35:33 AM
From: nspolar	Read Replies (1) \| Respond to of 209892

A few days ago a couple of board masters on IHub mentioned that 10/30 rates looked ready to fold. That same day or the day after, a strong reversal occurred. I recently penned it was a hunch of mine that 10/30 rates could well head up, and a lot. This will be bullish for gold, even if the dollar stabilizes. And if the dollar is to remain stabil, the rates will have to continue on up, otherwise it will reverse course and continue falling. Eventually it will do that anyway, it is just the interim here that is important. How long that is, I dunno. I will also state that I firmly believe the future health of the gen markets is strongly connected to what happens here. I have my style and I am currently long nothing but gold stuff, less than 2 % short. But as '04 unfolds I anticipate that as the end approaches the situation for me may well be reversed. The gen market imo is starting to suck wind, a little more each day. And here is what Mr. Sinclair thinks. I like this guy, not so much for his gold take, but for his anecdotal stuff. "The slow Christmas store sales and deep discounting by retailers speaks directly to the plastic nature of the business recovery which is largely based on the huge fiscal stimulus provided by two wars. Money supply is dropping like a stone, surprising everyone including the Chairman of the Federal Reserve. This is happening because of the rapid drop in the US dollar. That is bad news for the economy and for bonds. The Fed knows this and is creating money like wildfire on the short end holding an artificially short interest rate of 1%. The Fed believes it can overwhelm the bond market this way but the long bond is starting to smell a rat. Since the Fed has lost control of the money supply, it must increase the use and turnover of the outstanding dollars to keep the economy together until November of 2004. That means that US Velocity of Money must rise. Velocity will rise only if inflation rises. So the Fed holds the shortest rate down hoping that people will borrow at 1% and buy longer bonds at higher yields. They forget people will borrow at 1% and buy commodities and that is bulling these markets. Inflation is coming and when it hits it will blow commodities to the moon even if there is nothing left to bull the economy by the end of November of 2004. That will be a stagflation of world class proportions, dwarfing the events of 1978 to the end of the first quarter of 1980." And then: "The deeper we get into the Westmoreland mode of strategy in Iraq, the greater will be the number of guerrillas we have to fight. The Westmoreland strategy is the best international insurgent recruiting policy possible. As pictures are shown on Islamic TV of the 70 year old Iraqi who died on the spot of a heart attack when US forces put a hood on him, the more 18 year old Islamic kids will sign up with bin Laden and the more money pours out of oil into his coffers. It plays directly into his hands as if he ordered it." Pleasant thoughts re the future.