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To: ild who wrote (62967)	6/7/2006 2:16:55 PM
From: orkrious	Respond to of 110194

Date: Wed Jun 07 2006 14:01 trotsky (@the markets) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved every bounce, however insignificant, meets with more selling. this is not good at all - normally the stock market ( including the gold shares ) should experience at least some sort of rally to relieve oversold conditions. when this normal script isn't followed, something is seriously out of whack. the longer it takes for such a bounce to materialize, the bigger the probability that a panic takes hold. anyway, at least we know where we are NOT - we're not out of the woods yet.

To: ild who wrote (62967)	6/7/2006 2:30:01 PM
From: ild	Respond to of 110194

DJ Fed Guynn: Hopes China's Yuan Will Become More Flexible DJ Guynn: Much Inflation Pressure Comes From Service Sector DJ Fed's Guynn: Fed Will Not Get Behind Curve On Inflation DJ Fed's Guynn: Rate Policy Will Be Set Meeting By Meeting DJ Fed's Guynn: Combating Inflation Is Fed's Chief Mission DJ Fed's Guynn: Comfortable With Fed's Monetary Policy Path *DJ Fed Guynn: Strong Job Market Not Driving Up Labor Costs DJ Fed Guynn: Fed Will Not Get Behind The Curve On Inflation By Michael S. Derby Of DOW JONES NEWSWIRES DULUTH, Ga. (Dow Jones)--Federal Reserve Bank of Atlanta President Jack Guynn said Wednesday the central bank's paramount goal is keeping inflation pressures at bay, even if it means tightening rates as growth cools. "If I am faced with not being sure, I am not going...to take a risk that some of this (inflation pressure) is transitory," Guynn told reporters after a speech before a business group in Duluth, Ga. He added, "it's so much harder to get the genie back in the bottle" and central bankers "always have to be suspect" of what's happening on the inflation front. Guynn, who is a voting member of the interest-rate setting Federal Open Market Committee, said he's been expecting to see and is seeing evidence of economic growth moderating. But when it comes to inflation, recent readings are "riding a bit above the path I hoped we would be on by now." Guynn also warned "the consequences of a negative surprise on inflation are greater than a negative surprise on output," so it's price pressures central bankers need to focus most on. When it comes to price pressures, "we are going to do our dead level best not to let them get away from us," and markets should know "we are not asleep at the switch." DJ Fed Guynn: Fed Will Not Get Behind The Curve On Inflation -2- In his remarks to reporters, Guynn said "I don't think we are behind the curve" when it comes to targeting inflation with monetary policy. But he noted that now was a more uncertain time for making rate decisions, which are now being done with a "meeting to meeting judgment." Guynn added: "I am comfortable with the path we've been on" with monetary policy. He also reprised a sentiment from his speech and said "we are at a point in the cycle where we have gotten policy close to where it needs to be." The Federal Open Market Committee next meets at the end of the month in a gathering where markets are uncertain what rate action central bankers will take. Many economists are confident the Fed will maintain its overnight rate target at 5%, but many in markets, fueled by Fed officials' recent round of hawkish inflation remarks, reckon the policy makers will bump the target rate up to 5.25%. Guynn told reporters that a tight labor market - the current unemployment rate is a historically low 4.6% - is not sending signals suggesting the hiring environment is driving up unit labor costs, a key contributor to inflation. Guynn also said, in response to a question about the equity market's recent woes, that the day-to-day action there will not be an important part of his thinking at the upcoming FOMC gathering on June 28/29. In response to audience questions, Guynn said that much of the main driving force in U.S. inflation is not related to the goods producing sector. He said "much of the recent pressure is coming from services" and "it is in fact rent, it's airline fares, it's medical expenses" that are creating the upswing. He said that trends in the housing market suggest rental rates should rise over time. Guynn also said in response to an audience question that China has shown "some willingness" to adjust the flexibility of the yuan, and "I would like to think that would continue."