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

To: russwinter who wrote (24136)	1/6/2005 5:27:30 PM
From: ild	Respond to of 110194

Another 100,000 oz addition into GLD. streettracksgoldshares.com

To: russwinter who wrote (24136)	1/6/2005 6:37:13 PM
From: orkrious	Read Replies (1) \| Respond to of 110194

two Q&A's on fleck's site tonight mirror the views of many here Q With the CRB appearing to roll over and a potential hard landing in China, isn't the details of how the Fed screws things up important? If poor economic growth (sated consumer and overleveraged economy) is the macro trend, then doesn't the Fed decide whether we see a deflationary bust or a stagflation/hyperinflations? If so doesn't this have investment implications? Thanks and welcome back. A• When the economy starts to sputter such that it is undeniable- then we can see how the Fed may influence the outcome. I expect they will then start easing and the dollar will really collapse- that has alway been my view. Whether that results in inflation or deflation, we must wait and see, but it will be very bulllish for gold imo. Q Given that Europe's economy appears to be fundamentally deteriorating and the strong Euro is not helping these matters, shouldn't we continue to expect the Euro to decline relative to the dollar (as it has since the new year). By extension, through no real fundamental improvement in the U.S. economy, the dollar would gain in strength relative to the Euro and since the precious metal markets seem to only care about a weak dollar in relation to the Euro, shouldn't we expect precious metal prices and mining stocks to fall? Dollar strength would probably hurt U.S. stocks but since the price of gold/silver seems to rise and fall on the basis of the strength of the dollar, I would also expect precious metals to do poorly. What am I missing? A• Currencies do not trade solely based on relative GDP growth rates... but even if they did, the USA would be in trouble as it is going to slow down markedly, in my view. The problem with the dollar is all of our imbalances and what the Fed will do once it becomes clear we are decelarating and stock and real estate bubbles pop... that is THE bull case for metals.

To: russwinter who wrote (24136)	1/6/2005 7:02:46 PM
From: ild	Respond to of 110194

Flows: Jan 05 Independent Data on Fund Flows & Holdings Equity funds report net cash outflows totaling -$1.058 billion in the week ended 1/05/05; Taxable Bond funds report net cash inflows of $1.056 billion; Money Market funds report outflows of -$5.038 billion; Municipal Bond funds report net cash inflows of $56 million.

To: russwinter who wrote (24136)	1/6/2005 7:12:02 PM
From: NOW	Respond to of 110194

looks like they took their foot off the accelerator momentarily...

To: russwinter who wrote (24136)	1/6/2005 9:27:20 PM
From: mishedlo	Respond to of 110194

Russ – can you read this and tell me why anyone would want to buy the YEN BOJ's Fukui Says Easing Will Continue Until Deflation Defeated [Have they tried the helecopter method yet? Mish] Bank of Japan Governor Toshihiko Fukui said the central bank will keep pumping money into the world's second-largest economy until price increases are sustained. ``We have a very firm commitment to the market and to the general public'' to maintain the policy of expanding Japan's money supply, Fukui said in a speech to the Japan Society in New York. ``Until the core CPI index comes up above zero percent in a stable manner, we'll keep this monetary stance.'' [and people want to but the YEN, a currency whose own nation is desperately trying to debase - and telling the world that as well - too funny] The central bank projected in October that Japan's core consumer prices will rise 0.1 percent next fiscal year, which would be the first gain in eight years, after falling a projected 0.2 percent this year. In December, the bank held interest rates near zero and agreed to keep monthly purchases of government bonds from lenders at 1.2 trillion yen ($11 billion). The bank kept its reserves target at 35 trillion yen. The bank's goal is ``to end deflation entirely,'' Fukui said. ``We are still uncertain when we can expect positive consumer price index readings on a sustained basis.'' While Japan's economy is forecast to expand at the fastest pace in four years in the fiscal year that ends March 31, it expanded just 0.2 percent at an annual rate in the third quarter, less than the 1.1 percent median forecast in a Bloomberg News survey of professional forecasters. Fukui said he's ``more optimistic'' about the Japanese recovery than he was a year ago and sees the current slowdown as ``a temporary pause.'' `Regained Health' ``Japan's economy has virtually regained health that it lost a decade and a half ago,'' he said. The current slowdown in Japan was caused by transient phenomena such as natural disasters, a reduction in information technology inventories, bottlenecks in steel production and a slower growth abroad, Fukui said. ``The underlying trend of recovery remains intact,'' he said. The third-quarter slowdown was caused partly by a ``global soft patch'' that is ``already behind us.'' [yeah right – mish] Japan's economy will slow to 1.6 percent growth in the fiscal year that starts April 1, from this year's projected 2.1 percent, the fastest in four years, the Cabinet Office said on Dec. 20. The country's recovery is ``on a much firmer footing'' than it was in two earlier revivals that didn't last, Fukui said. That's because companies shed excess capacity, began investing in capital equipment again and improved profitability, he said. At the same time, banks have rid themselves of non-performing loans and are seeking to expand their services. Monetary Policy The Bank of Japan will assure that the recovery continues by maintaining its policy of quantitative monetary easing, Fukui said. That policy is becoming even more powerful as deflation expectations recede, pushing rates adjusted for inflation or deflation lower. ``The economic recovery has tended to slow deflation during the past few years,'' he said. ``The core consumer price index is still registering a small decline in recent months, while the corporate goods price index is rising moderately.'' Japanese consumer prices fell in November, extending a six- year bout of deflation, led by cheaper rice and electricity. Core prices, which exclude fresh food, fell 0.2 percent from a year earlier, the statistics bureau said in Tokyo. The median forecast of 28 economists surveyed by Bloomberg News was for a drop of 0.1 percent. Fukui declined to comment on the possibility of official intervention into the foreign exchange markets, saying that's the responsibility of the Ministry of Finance. [Why don’t they just print 2 trillion $ worth of YEN and buy US$ once a month every month until successful] The yen has risen 5.9 percent against the U.S. dollar over the past three months. Japan, which sold a record 32.9 trillion yen ($314 billion) in the fiscal year ended March 31 to stem the yen's gains, hasn't sold its currency this fiscal year. ``I don't deny some possibility that some developments in the foreign exchange market could throw the Japanese economy off course,'' he said. Therefore the central bank is monitoring develops in the currency markets ``very carefully,'' he said. [boom – there is the threat. Again I ask, why would anyone want to buy the YEN? mish] bloomberg.com