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

To: orkrious who wrote (62195)	5/30/2006 1:19:29 PM
From: Jack of All Trades	Respond to of 110194

I would think you could, not sure how liquid the futures are for it... never traded them...

To: orkrious who wrote (62195)	5/30/2006 1:24:07 PM
From: orkrious	Read Replies (2) \| Respond to of 110194

Date: Tue May 30 2006 12:31 trotsky (Mooney, 11:17) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "OPEC 'still' has the capacity to INCREASE or DECREASE supply, as it sees fit. The crude prices of the past few years have been manipulated upwards on FEAR and short term supply cutbacks, but the basic fact remains, that, at present, THERE IS NO SHORTAGE of supply. Oil producers and exporting countries are just happily sitting back counting all their windfall profits. Higher inflation is the inevitable outcome" actually, i think the market is worried about how TIGHT the remaining capacity of OPEC is. for most of the 1990's, OPEC had 6.5 million bbl./day in unused extra capacity, and Russia's output was rising strongly at the same time. NOW, OPEC's extra capacity has shrunk to 1m. bbl./day ( if it is that much ) and Russia's supply expansion has begun to reverse ( output will actually shrink this year after being flat last year ) . inflation is NOT the 'inevitable outcome' of high oil prices - however, high oil prices can be a RESULT of previous inflation. inflation is the term used to describe an expansion in the money supply. if the money supply stays flat and oil prices rise, other prices will come down. if money supply expands very fast, all sorts of prices stand to rise. a major cause of the commodities price rise seems to be a huge expansion in China's money supply ( which is growing at nearly 25% p.a. ) , coupled with a fixed Yuan exchange rate. the mechanism is described here: mises.org Date: Tue May 30 2006 12:09 trotsky (stx) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "Could this period be like 2000 where the NAZ was down big where the PM stocks kept marchin higher? " obviously not. the difference is that in 2000, the gold stocks had just ended one of their worst and longest lasting bear markets ever, while since 2002/3, they've been marching up together with the broader stock market - a correlation that seems to be quite cemented by now. i suspect this will only change once the Fed abandons its rate hike campaign. as Apollo remarked earlier, housing is diving off a cliff, but otoh, CPI and PPI are at levels that give ammunition to the hawks on the FOMC. also, judging from comments by Fed officials, they seem to harbor some delusions about the housing market pulling a UK-type 'no collapse' feat, which raises the likelihood of them staying the course. so i fear the gold sector will remain tied to the stock market at large for the time being