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

To: ild who wrote (33094)	5/24/2005 3:50:18 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Tue May 24 2005 15:18 trotsky (RIP@Miramar) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i actually think their problem is of a different nature. clearly the drill results are excellent...and since those are near surface discoveries, the feasibility study can hardly be a source of too much worry. more likely what is the problem is the still pending approval/permitting of the Doris North deposit. unless they get that permit, the best drill results in the world won't help them...if they don't get it, the entire Hope Bay project is a goner ( since the other deposits would have to go through the very same permitting rigmarole ) . Date: Tue May 24 2005 15:14 trotsky (Hambone, 14:38) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved not necessarily, since the Rand has often over long stretches led a life of its own. for instance, it is also important what the SARB does w.r.t. rates. recently it has been lowering them, in pretty big steps ( 50 bps. per step ) . also, much depends on the general sentiment toward emerging markets and their traded goverment debt paper. recently sentiment was positively euphoric, which indicates a swing of the pendulum in the other direction may be in the offing. Date: Tue May 24 2005 15:04 trotsky (AU-NB@the Rand) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved " When you say "better," do you mean from the position for STRENGTH ( less rand per dollar ) " yes. " Or do you refer to economic conditions of SA? " in part, but mostly it's the monetary conditions ( SA's rising yield curve, the compression of the interest rate differential between Rand and dollar and SA's money supply and credit growth - all of which looked a lot more supportive for the Rand in 2003 than they do now. also, SA has now had a large trade deficit for some time, and it normally sports a surplus ) . " Do you see the rand in worse position vs the dollar now than in say 2001 - 2002 when the dollar rose dramatically? " no, only in a worse position compared to what obtained in 2003/4. " Does the presence "Hot Money" supposedly in SA now fit into your thinking ? " absolutely. the Rand is a relatively illiquid currency, and hedge fund inflows to play the carry trade must have been a major source of its strength ( considering the trade deficit ) . the Rand's moves tend to be magnified volatility-wise by the fact that it's illiquid - therefore both periods of strength and weakness lead to fairly large moves.