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To: mishedlo who wrote (36402)	7/20/2005 3:46:36 PM
From: damainman	Read Replies (1) \| Respond to of 110194

May be nothing but the 5 and 10 crept closer today.

To: mishedlo who wrote (36402)	7/20/2005 3:48:21 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Wed Jul 20 2005 15:16 trotsky (morbius) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved Keynes was right? about what? i took your earlier comment to mean that economic growth can not possibly continue forever - presumably because it will run into resource constraints, the essential Malthusian argument. this i doubt, mainly because natural resources that run out for some reason, or become too scarce, tend to be replaced with something else. whale oil being a good example ( i doubt anyone remembers the whale oil crisis... ) . the possibility of conventional crude oil production peaking in the near future will be an interesting test case. i for one think the market will find a solution to the problem, as it always has when faced with something like this. this is of course independent of economic cycles that will still be with us. the imbalances wrought by the great fiat experiment will likely be resolved by a big global bust at some stage, but such recurring busts are simply a fact of life when money is subject to central planning. Date: Wed Jul 20 2005 15:03 trotsky (Goldfleeced) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved well, humans are decidedly not microbes, and economic growth is not a zero sum game. ultimately its only constraint is human ingenuity, and i don't see where the limits to that supposedly are ( of course resources are scarce and must be optimally allocated, which is the function of the free market ) . Date: Wed Jul 20 2005 14:58 trotsky (art, @VIX below 10) ID#248269: a fascinating study in complacency. what happens at zero? you get to short the market for free. Date: Wed Jul 20 2005 14:49 trotsky (AU_NB@uptick) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved in this case i believe it's simply a revelation about a deep psychological need harbored by Lenny-boy. he's so overeager not be seen as a 'wacko goldbug' and a reliable shill for the establishment instead, that he would just about say anything, as long as it comes across as denigrating gold ( which ironically, is his business, allegedly ) . his condescending tone is quite repulsive as it were...especially as i doubt that he has any great insights to impart. Date: Wed Jul 20 2005 14:32 trotsky (Goldfleeced) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "Mother nature can not support another capitalistic society like the US." this Malthusian myth will prove just as wrong this time around as it has every other time this prediction was made. Date: Wed Jul 20 2005 14:26 trotsky (@Kaplan) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "And gold, of course, goes lower," said Kaplan. the only problem with this comment is that it apparently did not go lower. all spanking attempts notwithstanding. Date: Wed Jul 20 2005 14:18 trotsky (BreXCEO@China, 13:28) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved absolutely agree...China's economic progress will by itself bring about political reform in due time ( in fact, the reform process has already begun ) . also, you are right to point out that economic advancement is NOT a zero-sum game as the leftists and more recently the neo-con statists would have us believe. Date: Wed Jul 20 2005 14:12 trotsky (AU_NB) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "...Authorities must struggle continuously to find the proper balance." oh no, those poor 'authorities'. a gold standard would relieve them from having to engage in this tortuous struggle....of course it would also relieve them of their jobs ( which is paid for by the same tax payers that they keep robbing...what a racket! )

To: mishedlo who wrote (36402)	7/20/2005 3:49:23 PM
From: Umunhum	Read Replies (3) \| Respond to of 110194

It would immediately invert a portion of the yield curve most likely. Either that or long term interest rates will go up. I am still waiting for your response to this: You look at the current UNSUSTAINABLE path, realize it is unsustainable, yet project commodity prices out into the future as if it is sustainable. Let's look ahead with your scenario. Do you think the Federal Government will take in more or less tax revenue with deflation? Do you think they will cut spending? Who is going to finance this growing deficit? How are we going to pay for the 11 million barrels per day of oil that we import? The only way the dollar could survive is if interest rates keep going up. If the dollar doesn't survive, what should you be holding? What if things just keep chugging along? Remember these things tend to last longer than anybody would believe. Then what should you hold? I don't want to be argumentative. I've invested heavily into what I believe is going to unfold and I just don't see how your scenario can happen.

To: mishedlo who wrote (36402)	7/21/2005 11:52:26 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

I would like to see 50 bps in August. that's quite a change. when he started raising didn't you think he'd have to stop at 1.75.

To: mishedlo who wrote (36402)	7/21/2005 1:27:20 PM
From: bcrafty	Read Replies (1) \| Respond to of 110194

mish, what did you think about Greenspan's comments that the efficacy of the flattening yield curve as an indicator has been diminished? Greenspan discounts flat yield curve Says economy not slowing, contrary to forecasting signal By Rex Nutting, MarketWatch Last Update: 12:35 PM ET July 21, 2005 WASHINGTON (MarketWatch) -- The Federal Reserve will continue to raise interest rates to keep inflation at bay, despite warnings from financial markets that purport to show slower growth ahead, Federal Reserve Chairman Alan Greenspan said Thursday. Some analysts have warned that a flattening yield curve -- a narrowing of spreads between short- and long-term interest rates -- is signaling a slowdown as it has before most economic slumps. But Greenspan argued otherwise. Because of changes in financial markets over the decades, the yield curve is no longer a fool-proof forecasting tool, he told the Senate Banking Committee on the second day of his semiannual testimony on the state of the economy. "The evidence very clearly indicates that its efficacy as a forecasting tool has diminished very dramatically because of economic events," Greenspan said. Other experts agree with Greenspan. The Conference Board said Thursday that it had changed the way it constructs the index of leading economic indicators, effectively reducing the impact of a narrow or inverted yield curve. See full story. "We do look at the structure of long-term rates and the inversion of yields as well as a whole panoply of everything else before we make judgments as to what we do with the federal funds rate," Greenspan said. The fed funds benchmark currently stands at 3.25%. Greenspan said that the Fed's goal is to ensure "maximum sustainable growth" and that the best way to do that is to keep inflation under control. Fed policymakers "make our judgments meeting by meeting," he said. The spread between the federal funds target rate and the benchmark 10-year Treasury has narrowed to 101 basis points. A basis point is the equivalent of 1/100th of a percentage point. The spread between the two-year note and the 10-year note stands at just 33 basis points. Housing Greenspan said there is no need for legislation to rein in the spread of exotic mortgage instruments, such as interest-only loans or adjustable-rate mortgages. And he said he sees no major impact on consumer spending from the end of the housing boom. "We don't need any legislative remedy," he said. "This is totally under the regulatory authorities of the banking agencies." Properly used, these new mortgage products are appropriate, he said. But there are big risks to both borrowers and lenders. "Fortunately, it is not a large enough part of the market to create serious systemic problems, but it is an issue," he said. In May, the Fed and other lending regulators issued a rare warning to lenders to make sure their standards hadn't slipped. On Tuesday, however, a letter from Greenspan to another congressional committee revealed that regulators did not intend to put an end to the froth in the market with that warning. The Fed is watching, he told lawmakers Thursday. "We at the Federal Reserve and other banking supervisors are looking at it, we're in discussion on examining these issues, and we're making decisions as to what, if any, guidance to the banking system we would endeavor to convey." Greenspan also said he's not worried that the end of the housing boom -- whenever it may come -- will have a major impact on the national economy, although it could cause a significant slump in consumer spending in some local areas with "frothy" housing markets. Greenspan expects capital spending by businesses to step up and fill the gap from slower consumer spending. Greenspan said he saw no evidence that the housing boom was about to end. China While he said he had not had a chance to fully examine China's decision to loosen its peg with the U.S. dollar, he called it a good first step. Even if China and other Asian central banks were to stop buying Treasurys to maintain the value of their currencies, it would have very little impact on U.S. interest rates, Greenspan said. Fed studies show that foreign buying has cut long-term rates by about a half percentage point, he said. "That's the magnitude we are talking about," he said. Markets may have already anticipated a switch in foreign buying in the Treasury market, he said. marketwatch.com