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

To: Amelia Carhartt who wrote (13294)	6/17/1998 10:04:00 AM
From: Zardoz	Read Replies (2) \| Respond to of 116762

Higher gold price, short term.

To: Amelia Carhartt who wrote (13294)	6/17/1998 1:13:00 PM
From: ahhaha	Read Replies (1) \| Respond to of 116762

The FED is just the broker. It's the Treasury, the Administration that is behind this latest imbecilic breakthrough. It is Rubin's move. This guy is a clown. Rubin wants a slowly declining yen for the purpose of hiding our inflation. When the yen goes into waterfall, it creates a beggar-thy-neighbor exchange rate situation in other Asian tigers. That is, China, Singapore, Indonesia, Malaysia, Thailand, South Korea, would have to devalue their currencies in order to maintain their competitive position against the dominant Japanese. The faster all of these currencies fall, the greater is the desire among American manufacturers to buy from Asia. If that happens, the unions can't get their inflationary wage settlements. In the final analysis the Democrats will err to protect the slobs. This action relieves the Japanese from taking appropriate action which would have reversed the yen's slide. The dollar would have started down anyway. Now the market will challenge this action by selling yen. The market has far greater resources than these two Central Banks. The result is that the two governments are trying to fix the price in the free market. It never works. We will end up squandering money for nothing, but since we are in an intrinsically inflationary state, the dollar selling has another effect, it causes our money supply to rise unless the FED does offsetting sales. That means sales of T-bills. The reason is that the foreign purchaser of dollars factors them back into T-bills which gives the market an artificial stimulus. It is admitted that coordinated intervention with the BOJ removes much of that through the countervailing action that has the BOJ selling T-bills. It's the lagged response of foreign private bank's refactoring that causes the problem because the FED will continue even keel policy by adding reserves when they should be creating a dearth of reserves to absorb the delayed private purchases. The FED doesn't want to send out a signal that might be misinterpreted as a move to tightening. They don't want to encourage the open market to start on the road it will go inevitably. So, they add reserves under the auspices of business as usual. What the Treasury and FED are doing here is throwing gasoline on the fire. They're borrowing against the future. This move is the worst of all worlds. Part of the strategy of it is to give Summers some meat to support the Administration's recommendation for Japan. The recommendations will be fiscal policy exhortations. That's ok, but that won't have effect for a long time. Japan needs monetary policy actions and they are too fearful to take them. Summers is from socialist Harvard. He has a little more knowledge than Rubin, but they are of the school of Democrat talkers. That is, they believe in partnership agreements even when there are contrary positions and sovereign issues at hand. They are deluded. It is astonishing that all these guys are so illiterate. They know nothing about the lessons of the past and those whom do know are retired or dead. We don't get much help from the elderly, it's against the law of utilizing your resources. Now will begin the several months battle between the market and the authorities. This will cause stock market volatility and exacerbate our inflation problem. It won't help Japan at all. It just shoves the problems under the rug. It delays the inevitable, enabling forces to get more deeply entrenched so that more Draconian measures will be required. The situation eventually will cause Japanese-American relations to become far colder and for gold to climb much higher. Notice the stock market. This is tangible bad news and its up and running. That's why you can't trade the stock market. You have to know know stupid people can get and that is unbounded. How smart they can be is finite, bounded, and not very much either.