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Gold/Mining/Energy : At a bottom now for gold? -- Ignore unavailable to you. Want to Upgrade?

To: Pete Schueler who wrote (1746)	9/30/1998 1:43:00 PM
From: ahhaha	Respond to of 1911

The transition phase and the period of reflation are notably constructive for stocks for several reasons. Stocks are perceived as the only effective hedge against inflation as long as inflation is mild. The powering up of real economy either as reflex or from money creation causes revenues to rise. If extra money is perceived to be too risky to go into term projects, it goes into speculation in financial assets, mostly stocks. Another consideration is what kinds of stocks are bid up. In some cycles it's smokestack, gold, oil chemicals, some durables. Maybe in this one it will be semis, telecommunication, biotech, computers, internet, oils, and gold. The periods of stagflation and other inefficiencies are downstream and must await the revival of the rest of the world. If you're saying that the statement, "good for equities", doesn't tell you anything, you won't get much argument from me. When the FED creates lots of money like they have for the last six months, the downside is limited. Stocks are falling into a pool of cash. We are in the fifth leg of the downside and if you are patient to wait for the denouement, you will get great positions. It is not possible to estimate the amplitude of the second shoe dropping. That would require estimating how stupid people can get. I can tell you that the institutions are plenty worried and the word is out that discipline is still in tact. People are so disappointed FED didn't give them more money to make things better. When will they learn that with money less is better. Never. As for shrinking margins it's a matter of which corporations. Then there is the fact that the economies that are slowing are foreign. Ours isn't. We have only slightly slowed in the rate of growth. That's why the FED can't get aggressive about rate manipulation. It's bad enough that they persist in the overt money creation.