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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: TH who wrote (264)	2/19/2004 4:46:23 PM
From: mishedlo	Respond to of 116555

German 2003 Budget Deficit Revised Down to 3.9% of GDP From 4% Feb. 19 (Bloomberg) -- Germany's budget deficit was smaller than previously estimated last year thanks to a rebound in tax receipts in the final quarter, the Federal Statistics Office reported. The country's total budget deficit -- including shortfalls from federal, regional and local budgets and social insurance accounts -- was 3.9 percent of gross domestic product, compared with an initial estimate of 4 percent of GDP. Europe's largest economy shrank 0.1 percent last year, the first annual contraction in a decade, eroding tax receipts and boosting welfare payments. Still, the Finance Ministry said two weeks ago an unexpected rebound in tax gains in last year's final quarter helped limit the annual budget shortfall. Germany had previously breached the European Union's 3 percent limit on deficits in 2002, with a shortfall equal to 3.5 percent of GDP. The government says it expects this year's deficit to be 3.5 percent of GDP. A spokesman for Finance Minister Hans Eichel yesterday said it will be ``difficult'' to hold next year's deficit to EU standards. The European Commission yesterday said the deficit could reach 3.4 percent. quote.bloomberg.com

To: TH who wrote (264)	2/19/2004 4:57:58 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

mishedlo, Great thread. Two questions (well more than that really). Do you have a target for a correction in gold and silver? I assume the correction would be triggered in part from an improvement in the dollar? And, assuming gold has been fairly stable in Euros, when we talk about a deflation pullback in the price of gold, I assume this must be a global deflation? Or is it that the decline in gold by US Dollars, would bring weakness into the global market? Thx, learn a lot here, and there. TH Are you TH the third? Gold and silver are totally dependent on the US$. I do not know if it bounces or breaks down. It might just stay rangebound for another month while currency bulls and bears battle it out. There are other influences. If Europe cuts I think the US$ gets abounce and gold and silver will be hit hard. My LT view is that it will not matter. The US$ is headed lower and gold and silver up. I still do not discount a move to the 200Ma on gold or silver and that would be very painful to sit thru. Perhaps very very painful. That is why I prefer interest rate plays here cause I do not think there will be hikes this year, and IF there are hikes at all they will be smaller than expected. Eurodollars and Euribors (EURO interest rate futures) are still a good buy here but they were an unbelievably good but at the beginning of dec. Right wrong or indifferent I bailed on miners across the board yesterday and today but I still have a silver spread on and an aug call option on gold. I believe Europe will be forced to cut interest rates (either by a slumping economy or by a rising Euro). I wish they would just get it over with. I am a buyer of gold for sure AFTER that happens. Another factor for gold is seasonality. The weak period can last for another month or so +- a couple weeks in either direction. M