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

To: zonder who wrote (6093)	5/11/2004 5:10:15 AM
From: JRI	Respond to of 116555

If yield curve flattens, how does that affect mortgage rates? would/can Fed target low-end and try to 'pursuade' (g) markets to keep longer-term rates relatively flat (keeping hope alive! keep the bubble alive!)

To: zonder who wrote (6093)	5/11/2004 8:35:18 AM
From: mishedlo	Respond to of 116555

Hathaway on Gold While a rise in interest rates might be presumed in the popular media to be theoretically bad for gold, it is more important to ask and answer several related questions before jumping to any particular conclusion. First, is the prospective rise in interest rates the beginning or the end of a process? Second, are the increases in nominal interest rates identical to real interest rates? Third, and most important, will the interest rate increases be favorable or adverse for the returns on financial assets?... We were cheered by the recent FT disparagement of gold. It reminded us of an FT opus entitled “The Death of Gold” published December 13th, 1997, approximately 18 months before the bull market in gold commenced. Then, as now, the FT point of view was heavily influenced by official sector actions: “And, two weeks ago, Argentina revealed that it had sold its entire gold reserves in the first half of the year, all 124 tonnes, and invested the proceeds of $1.46 billion in US treasury bonds.” Our math says that Argentina received approximately $342/ounce or 13% less than the current market, to invest in a depreciating asset. We were cheered also by the cover story in Barron's (5/3/04) titled “Bear Overboard: The Big Money Poll bulls outnumber bears by a wide margin, despite the market's recent woes.” As contrarian investors, we are thankful for the continual feast of ignorance served up by the financial media. The day that the Financial Times, Barron's, or the equivalent begin to advocate gold will rank among the classic sell signals of all time. Read more at: tocquevillefunds.com