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

To: orkrious who wrote (2141)	3/15/2004 9:01:17 PM
From: yard_man	Read Replies (2) \| Respond to of 116555

>>By then the bond market will wake up to the fact that monetary inflation is global and begin to demand higher compensation in the form of higher interest rates. With monetary reflation running globally, we should also begin to see the price of gold rise against other currencies<< I think it is a mistaken thesis -- i.e. the gold bull gets started in earnest when rates rise. It is low rates, loose money which has set the bull in motion in the first place -- sustained higher rates would serve to move money out of gold. But suppose we get this bond debacle folks have been talking about since the dollar first started dropping -- what then?? You know what -- economic collapse -- then where would rates be headed ... again? Also higher rates here vs elsewhere would tend to be supportive of the USD which also ==> lower gold price. One more observation -- if you'll permit me <g> Practically speaking -- when the fit hits the shan sometime this decade -- this list of his is upside down: Silver & Gold Natural Gas & Oil Water Food First, we are gonna need water and food. If we have enough of those, then we are going to need energy to keep warm and to be mobile. Then, and only then, are we going to need any financial assets -- assuming we have functioning markets. <g>

To: orkrious who wrote (2141)	3/15/2004 9:24:01 PM
From: Jim Willie CB	Respond to of 116555

I got both euro and jyen near 50MA support another two weeks and we have contact, if no exchange move a little move down, and we have contact also / jim

To: orkrious who wrote (2141)	3/15/2004 9:33:39 PM
From: mishedlo	Respond to of 116555

Plunger on the deficit The reason for running a large deficit is because consumption demand (include the rest of the world) is low. The reason for this is because savings demand (include the rest of the world) is high. Add in the deflationary environment and you get high demand for Treasuries in particular. Japan's run an 8% of GDP budget deficit for 10 years and has nearly 200% of government debt to GDP ... and 10Y yields are 1.4%. Demand from prospective retirees is just relentless, and Japan's demographics lead the world's in terms of longevity and the smaller family trend. Coming here soon. Plunger.