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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: SliderOnTheBlack who wrote (4613)	2/28/2007 3:38:49 PM
From: inchingup	Read Replies (1) \| Respond to of 50418

"Fed rate cut good, or bad for Gold?" I'll opt the agnostic view.

To: SliderOnTheBlack who wrote (4613)	2/28/2007 3:49:18 PM
From: philv	Respond to of 50418

Its a loaded question. Depends on the severity of the recession, and the degree of rate cuts. If rate cuts explode to the downside, gold will explode to the upside. The smaller the rate cut, the smaller gold's rally.

To: SliderOnTheBlack who wrote (4613)	2/28/2007 4:03:10 PM
From: nohalo	Read Replies (2) \| Respond to of 50418

If the US economy rolls over into a recession, then economic output will be markedly reduced, jobs will be lost, confidence will be reduced, and buyers will vanish. In this scenario, regardless of interest rate cuts, gold and other commodities will fall. Interest rate cuts will follow recession, and will be immaterial to the gold price.

To: SliderOnTheBlack who wrote (4613)	2/28/2007 5:10:59 PM
From: maceng2	Respond to of 50418

Q:If the U.S. economy rolls over into a recession and the Fed cuts rates -- what will gold do A: Cutting rates won't do much to stop a recession, the forces will already be in place and be unstoppable. Cutting rates will make fiat currencies weaker as investing in them won't be as worthwhile. Commodity prices will reflect this weakness, but lower demand in commodities will balance this force. Lots of money will disappear because of businesses going broke. Getting a loan will become next to impossible over time. Short term and medium term gold and the miners will track the general market. If things recover, money will go almost immediately into "insurance stocks" like good miners, but if things plunge again there will be no "insurance" except being in funds at all times, even if your broker goes well... broke. The history indicates gold (and in particular the miners) will tank along with everything else. The reason why is simple. The stock market will go though a painful re evaluation and stock prices will eventually reflect a cautious conservative price reflecting a companies true worth to the stock holder. There will be an horrendous search for liquidity as equity prices plunge to that level involving some big bounces where things "nearly" recover each time. Gold and miner stocks will be sold off to get into funds just like everything else. There are already many terrible stories about what happens to money you put into any pension fund. I personally doubt if either of my pensions I saved for while working will be worth a bean when I retire. Precious metals will eventually emerge as the best way to preserve wealth over time, and precious metals will soar to incredibly high levels. Pensions will then work for perhaps many decades until some idiot rediscovers how you can make a stock market explode and make everybody rich. jmho.

To: SliderOnTheBlack who wrote (4613)	2/28/2007 5:18:23 PM
From: RonMerks	Respond to of 50418

Rate cuts and gold Im starting to be convinced that the US is going into a mild recession and that most commoditys and gold are now already starting to price a recession in. So I think commoditys are heading lower and the Fed will not cut rates this year unless housing accelerates to the downside, or unless the subprime mess cant be contained and spreads to the broader banking sector. I think Gold will touch $550 and Oil could dip a buck, or two under $50 by late 2007. But if Bush invades Iran- then I think gold and silver explode. Deficits will spiral further out of control- sending the US dollar to the mid 60's. Thats the recepie for my $25 silver and $1000 gold. Ron

To: SliderOnTheBlack who wrote (4613)	2/28/2007 6:05:53 PM
From: surelockhomes	Respond to of 50418

Oooooops - EOM

To: SliderOnTheBlack who wrote (4613)	2/28/2007 6:13:45 PM
From: surelockhomes	Respond to of 50418

>>Poll: Fed rate cut good, or bad for Gold?<< Bad >>If the U.S. economy rolls over into a recession and the Fed cuts rates -- what will gold do? Opinions on whether gold will explode, rally slightly, do nothing, sell off slightly, or collapse...along with reasons why.<< Collapse. Recession and then deflation, it's the Fediots back to 1% or less. Liquidity will dry up like a prune. It will be like what happened to a Japanese Yen holder in 1990. Everything he could have bought collapsed except Japanese Government bonds, which rallied and had a nice yield. The trade for the decade. futuresource.com .

To: SliderOnTheBlack who wrote (4613)	2/28/2007 6:50:24 PM
From: jim_p	Read Replies (3) \| Respond to of 50418

Here's my take for what it’s worth: 1. The US will be in a recession prior to the second half of the year, and it will not be a short and painless one. 2. Inflation will remain above the feds target rate for the rest of 2007 (Just take a look at grain and other commodity futures and it's a given that food prices are headed higher over the next year). Too much liquidity is catching up with us and a lower USD will help keep inflation high. 3. The sub-prime lending with flow over into other financial markets which will result in a credit crunch in the second half of 07 (The pendulum always swings too far in both directions and it's been in uncharted territory for several years now). We’re only in the first or second inning in the unwinding of the imprudent lending practices that have gone on now for a very long time period with 7-8 more innings to follow. The big unknown is what impact this will have on the derivatives market with all of the credit guaranties out there??? 4. The fed will be forced to lower rates despite higher inflation to avoid a panic in the financial markets. 5. The $USD will fall further when the fed is forced to lower rates despite higher inflation. So....in the short run gold will fall along with the rest of the markets as we unwind the latest liquidity driven bubble in housing/commodities and begin to pay the price for the imprudent lending practices that have gone on for more than several years. Longer term gold will rise as the USD falls and liquidity is pumped back into the system to avoid a panic. We are just beginning to see a few of the cracks in the system that have resulted from too much liquidity which resulted in the tech bubble and then on to the commodity bubble and then on to the current housing bubble. More bubbles or is it time to pay the piper??? Too much liquidity has caused several bubbles, but it will always lead to higher inflation. That’s my take. Long QID and yesterday was one of my best days in years. Jim