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

To: Cogito Ergo Sum who wrote (46191)	2/9/2006 9:20:26 PM
From: regli	Read Replies (2) \| Respond to of 116555

I disagree with that in general. I concur that once liquidity is reduced we will hit a severe slowdown. This will clearly affect commodities and initially might also affect gold (see yesterday). However, I expect that the result of liquidity withdrawal will be significantly reduced purchases of U.S. debt by FCBs leading to a potentially harsh dollar devaluation. This won't be a highly unexpected event and therefore I expect money to seek safe heavens early and the most obvious one will be gold.