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To: Tommaso who wrote (77625)	5/4/2009 7:17:02 PM
From: Keith Feral	Respond to of 118717

Go ahead and sell your stocks once we start to see real signs of economic growth. The FED will certainly start increasing interest rates. It's basically a confirmation of economic recovery. I thought the FED was crazy by jacking up rates too fast after 2002. It ended up costing me buckets of money by getting too negative on the way back up. Then, I stayed around too long when interest rates finally began to fall, I thought that would surely help the markets. If I went back through the past 18 months, I should have sold stocks and bought Treasuries when the FED made their first cut. Reentry would have been early last year when FED funds levelled out at 2%. However, I should have started selling again as soon as the FED started cutting rates a second time. That would have been a clear sign of further economic risk. The big mistake was not cutting all equity exposure in the summer of 2007 when the FED started to cut from 5.25%. After that, it was a long strange trip of denial. finance.yahoo.com Now, the market is telling people to dump Treasuries and buy stocks. This article is a great example of selective analysis which suggests that Treasuries outperform stocks.

To: Tommaso who wrote (77625)	5/4/2009 7:56:55 PM
From: Sober	Read Replies (1) \| Respond to of 118717

Rising interest rates are usually used to fight inflation, inflation not being good for any economy, and inflation is not even really a market event, but rather a money event. We will have inflation (are having some already) even if the economic market does not do well, due to the creation of credit and its dilution effect on the dollar. Raising interest rates is a technique used to combat inflation, and is usually only tried when an economy is healthy. It would be suicidal now. At least that is how I understand it. Gold options on the increase for December... lemetropolecafe.com Sober