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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Goldbug Guru who wrote (5033)	7/3/1998 5:22:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 9980

Goldbug, a 600 point decline in the Dow will be refreshing, I do not expect any drop of close to that magnitude for quite some time (at least until October. As I have said many times on this thread, until we get a real slow down in the economy, liquidity will drive these markets. With current inflation at barely 2%/year, even the long term bond is cheap. With the government scheduled to be flush in funds, they will not issue much of these bonds (roll over) creating a shortage of these bonds. With a plurality of the states running budget surpluses, you have additional excess liquidity. And with a flow of about $200 Billions from Japan's savings trying to find better returns in world market, one can make a case of between $300 to $500 billion bucks on a yearly basis looking for returns. Some will go to bonds, lowering their return and as result the return I showed on MRK above 5% will look pretty good. Sure the party will be over, someday, either replaced with a solid bear market or with just a trading range, but Armageddon? I do not see it yet. Gold is still the worse place to be for the time being, an infertile commodity with an overhanging supply of 10 years production in central banks. Zeev

To: Goldbug Guru who wrote (5033)	7/5/1998 12:26:00 PM
From: Bonnie Bear	Read Replies (3) \| Respond to of 9980

Hard working Joes.... I don't understand the math, something just doesn't add up. American money isn't fueling this market, according to CNBC the average American has something like $4000 in a mutual fund. If it's in a 401K he/she's probably not going to bolt and run. In fact the US mutual fund money has been declining since last year and the amount of foreign-owned bonds has dropped sharply. The overvaluation is not uniform; I can find REITS, small banks and microcaps selling at book value and worth more than their bond holdings. BTW the new market limit is 30% in one day, not 600 points. A lot of people went to a lot of trouble to change those limits.