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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 (6)	11/10/1997 9:11:00 PM
From: MUDMAN	Read Replies (1) \| Respond to of 22

Bobby: Remember that for most bond traders that 1/2 hr is a long time. They tend to trade on both technicals and fundamentals although when the trend is in place ride it! Right now most traders look see diminished supply of new Treaury debt, the reported inflation numbers, and the Fed on hold. Putting those things together the market is bullish. However, conventional wisdom is usually wrong. You mentioned an interesting dilemma about the Japanese banks. So far there has been little liquidating of US tsy bonds. (One way to look see is to look at the change in the Fed's holding of securities for foreign central banks; I think it is printed in Barron's.) The fact is US Tsy bonds look very attractive on a relative basis vs. other industrialized countries. Even if the Asians sell their holdings, becuase of the reduced issuance by the treasury, this supply would be easily obsorbed.