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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: gregor who wrote (8644)	3/22/1998 3:16:00 PM
From: Bob Tate	Read Replies (2) \| Respond to of 116766

>>>>>Now if the price of gold starts to climb and the Federal Reserve raises interest rates that will be two more parallels and things will get very interesting." I agree with this prediction. There must be a start of interest rates hikes to initiate a major DOW correction or a crash.<<<<< <<<< Absolutely, I agree also. Also wouldn't you expect the pog to precede an interest rate hike, and Japan recovering quicker than expected , and Asia economies coming back faster than expected. This being the case what is the earliest evolution of events IYO..gregor>>>> Asian economies are very much export driven and latest rise in USA trade imbalance pointing to greater competitive edge they have. The fact that copper picked up in price is early indicator Asian manufacturers are taking big orders which soon will end up in North America. Bellow are two precondition stated by Warren Buffet for sustained DOW rise. One of them will be effected by above. Toady's Toronto Star daily quoted Buffett """" a year ago ,Buffett writes, he and Charlie Munger stated that we did not consider the market overvalued if 1) interest rates remained where they were or fell, and 2) American business continued to earn the remarkable returns on equity that it had recorded """". A year ago he was correct. His latest remarks pushed DOW another 300 point last week. What the writer is pointing to we should be more closely looking into his actions not words. His holding company in 1997 was net seller of about 5% of a beginning portfolio. If I'm correct his physical silver purchase amounted to about 2% of his porfolio. This gives you almost 40% new investment made in Ag. He purchased zero-coupon US treasury bonds and smaller investment into derivative contracts for 14 mil barrels of oil. He started to play on the safe side. Discounting other world events, the start of short interest rise by FEDS may be clear indicator how all of this will play out. I believe history repeats itself. 1987 crash in timing and magnitude is likely outcome. POG is denominated in USD and is locked in phenomenal demand for USA $. To predict it you have to see what will effect demand and supply of US $. On supply side it is expanding at high rate. On demand side possible scenario is as DOW craps capital outflow will trigger fall of USD. If we add speculative, panic, instability, and remove possible political interferance factors POG rise should proceed major market downturn. I like somebody's idea that toady's inflation is accumulated in stock bobble and not clearly measured or visible with other indicators.