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

To: NOW who wrote (14634)	11/2/2004 3:49:50 PM
From: mishedlo	Respond to of 116555

Date: Tue Nov 02 2004 11:54 trotsky (Winston, 11:21) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "On robnoel's current live interview, Al Martin just stated: 'Kerry people have said their regime would have a soft dollar policy--it would be forced on them by current imbalances in the system...'" Al Martin may have misheard. Bob Rubin strikes me as a spokesman for the likely future Kerry stance on the dollar, and more importantly, the deficit, and when i heard him talk a week ago, he was clearly pining for budget surpluses and a strong dollar. imo a Kerry win would lead many people to mistakenly believe that it would be bad for the dollar an good for gold, but the opposite is imo true. there hasn't been a better 'gold president' than Bush in ages. Date: Tue Nov 02 2004 12:50 trotsky (pm stock money flows) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i detect a slight short term improvement - still negative overall ( i.e. the cumulative flows ) , but they have begun to improve immediately after the PoG got whacked down to its day lows.

To: NOW who wrote (14634)	11/2/2004 3:54:33 PM
From: mishedlo	Respond to of 116555

Date: Tue Nov 02 2004 14:52 trotsky (P. Yorkie, 12:51) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "What POG needs to get it moving up is some noticable inflation. If you are going to get inflation, oil will be the cause IMHO. " wrong on both counts. 1. historically, the real value of gold has fared best in times of DEflation, not inflation. while nominal price gains tend to be larger during inflations, they can't make up for the purchasing power lost in the denominating currency. 2. high oil prices do NOT CAUSE inflation. inflation is caused by the Fed's printing press. if e.g. the money supply were totally fixed, oil prices could still rise to denote a shortage. but it should be obvious that no 'general' price inflation could possibly occur - other prices would have to fall, or oil demand be sufficiently curtailed, to make up for the price rise. since year-on-year money supply growth rates are currently at or close to 10-year lows ( depending on the money aggregate one is watching ) , it is highly unlikely that inflation will strike, and if it does, it won't have been 'caused' by high oil prices. first, money supply growth rates would have to expand again. Date: Tue Nov 02 2004 13:40 trotsky (Mooney@crude) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved congrats on the timely spotting of the correction in crude - but i think it's just testing the previous break-out over $49-$50...for reasons previously discussed ( i.e. the slight net speculative short position which is mostly accounted for by small traders ) . that said, the medium term fundamentals are bound to deteriorate the more of the temporarily lost Gulf production comes back online. i also note a complete lack of cold winter weather thus far - in contrast to various forecasts that were made in recent months. but the market remains tight for other, more important reasons, namely strong demand growth coinciding with more and more depletion in major producing regions - that should keep the long term bull market intact, regardless of short to medium term gyrations, at least until the world relapses into synchronized recession.