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Gold/Mining/Energy : GOLD: WHAT IF IT IS NOW JUST A COMMODITY? -- Ignore unavailable to you. Want to Upgrade?

To: Bobby Yellin who wrote (4)	11/8/1997 7:53:00 AM
From: MUDMAN	Read Replies (2) \| Respond to of 22

I couldn't agree more on inflation. CERTAIN items have gone down in px: clothing, food, toiletries. However the BIG ticket items sure haven't: taxes, insurance, college tuition, tolls, autos, most housing, health care. I work in the US bond market and was besides myself as the market just blinked away the strong employment report yesterday. All item were substantially stronger than the market expected: nonfarm payrolls 284m vs. 205 expected; rate 4.7% vs 4.8% exp. and avg hourly earnings +0.5% vs. 0.3% expected. The market reaction begs the question: where would have US bonds have gone if the report was the opposite of what came out: weaker than expected? No doubt Greenspan speaks from both sides. "Official inflation measures overstate" and "we have risk on the inflation side". CB's want to kill gold. Sooner or later (later, though I'm afraid) they are playing a losing hand. If they succeed in driving the price down into the $200's production will halt and the demand/supply will overtake and correct. Manipulated markets never stay that way forever. But we should relize they have the strong hand in here: they have supply and don't have to worry about their P&L. In addition, they have the media and the mainstream investment community on their side. I hope I'm wrong.