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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ItsAllCyclical who wrote (8525)	2/23/2004 10:37:27 PM
From: mishedlo	Read Replies (2) \| Respond to of 110194

It does not matter whether it is irrational or not. Gold rises and falls with the US$ and rising interest rats will help the US$. In the long haul the US$ is toast, so I am talking about the initial reaction. But initial reactions can be painful can they not? Look at the $HUI recently for a clue. If you do not want to believe me, believe how the market is reacting. The whole thing is moot anyway IMO, cause the FED aint hiking IMO. M

To: ItsAllCyclical who wrote (8525)	2/23/2004 10:55:53 PM
From: TheSlowLane	Respond to of 110194

IAC - That's basically it. And although Coxe thinks the Fed has delayed raising too long already, I don't see him give an indication as to exactly when that will happen. I don't recall Coxe ever recommending shorting Treasuries either. He recommends base metals, energy and gold in that order. "...gold may pull back to 375, who knows what the level is on this, but if the reason that it’s getting knocked down now is because of a rally in the dollar driven by the perception that the inflation numbers will force the Fed will move soon, that is a knee-jerk reaction and in its own way is stupid as the reaction where some Wall Street strategists in November who had not been recommending the metals came out with a recommendation to buy them because the US had that spectacular GDP number, 8% in the third quarter. And that was really dumb! Because that did not produce an increase in metals demand. It was, as you know, the new middle class in Asia that was producing the increase in metals demand. So, the markets can, on a short term basis, do stupid things, where they’re not responding rationally to news. But that doesn’t mean that the long-term story has changed. The long-term story still is that we are in the early stages of a commodity bull market that has not been experienced, anything like it, since the 1950’s. And so we’ll have setbacks along the way, particularly because people still in these industries remain cautious. If you read the statements of Chip Goodyear of Billiton about what should be the policies here, he said that he does not believe, he said that the small companies that are financing stock to go out and drill new ore bodies, he cautioned that they should not do this because what you need is ore bodies which are economic right through the cycle as he put it. In other words, that prices of metals are going to fall back. That remains the view of the big mining companies and it’s of that kind of caution that sustained bull markets are made."