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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: jimsioi who wrote (11423)	5/18/2004 7:02:46 AM
From: jimsioi	Read Replies (1) \| Respond to of 108596

Somebody hits on points why now is different.... Captain Hook gold-eagle.com "I would like to make a point I've been meaning to comment on for quite some time, and what I consider to be a 'key flaw' in the bullish rationale at this juncture, rising oil / commodities prices are not creating the same inflationary conditions today when compared to the 1970's episode, which in my opinion is large part of the reason gold has acted so poorly. Therein, and comparing what is ultimately going to matter, which is 'purchasing power', not only on the part of consumers in the economy, but investors in the markets, the situation today when compared to the 70's is quite different indeed. (My note: "different" - at last somebody dared to say it.....) In the 70's, we had a period of rapid wage inflation directly ahead at a comparable juncture to our current position in the gold cycle, where today at best, we can only hope for slow decay in real terms as a result of the pressures globalization has brought into the picture. For this reason, and remaining fully aware supply side constraints are likely to keep commodities prices relatively buoyant despite the aforementioned condition directly above, increasing costs (i.e. start thinking beyond just commodities to the finished product, interest rates, and any other rising costs that will squeeze disposable incomes) are acting as a tax on disposable incomes at this point. In fact, and at best, which does leave the door open to a more robust precious metals market at some point down the road once again, we are in a period of 'stagflation', where a sufficiently rising money supply is just enough to offset deflation because there is little regenerative (organic) growth within our mature economies, and where debt levels continue to rise requiring more and more new money to feed the machine all the time, leaving little else for other considerations outside of essentials for a growing number. This condition is evident in recently released official statistics showing incomes are increasing at exactly the same rate as spending, and is the single biggest reason gold continues to lag the commodity complex in my opinion, given of course, and as mentioned previously, there has been insufficient interest in the commodity itself because of the greater profit allure in the stocks, as speculators endeavor to become millionaires overnight. (i.e. a destructive self-fulfilling prophecy.) This is why gold remains relatively weak on the bid side, as even soybeans, and certainly silver until more recently, seem more apt to get the job done compared to the metal of kings."

To: jimsioi who wrote (11423)	5/18/2004 7:51:00 AM
From: c.hinton	Respond to of 108596

re gold cycle. perhaps tax and currencies export policies also have a role to play.in europe back then and until the late 80s moving cash from one country to another,largely to avoid taxes and inflation. was illegal.right now it is done at the push of a button.tax rates are also much less than they once were.when pensions start comming due in a big way there will be much more reason to HIDE ones money,and what better way than compact,untarnishable and inedible gold(Rats and mice will make a nest of your cash nest egg)