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

To: ahhaha who wrote (1754)	10/2/1998 11:07:00 AM
From: ahhaha	Read Replies (2) \| Respond to of 1911

It's interesting that the dollar is taking the plunge against most currencies, but not against the yen. The undermining of the money base from flight of capital into US T-bonds may be slowing. The dollar's effect has been seen mainly in risk assets, stocks, as far as % change, and this trend might accelerate if the yen starts up. It will as soon as Japan appears to be doing something constructive about the problem the world perceives as the problem. In combination with the exploding money supply a weak dollar against the major currencies will cause inflation to blossom regardless of GNP growth status or bank credit standards tightening. This will surprise a lot of people. FED has painted themselves into a corner. Jerry Jordan was the only one to get it right as evidenced by the minutes of FOMC 9/29/98. Earlier this year Japan needed to pump and the FED needed to exercise restraint in order to give themselves latitude. Instead, they pursued a policy of fear, fear of what the stock market would do and fear of letting gamblers lose. Way back when Fed Board would put a low priority on the stock market. If you conduct sound policy, the stock market gyrations won't matter and neither will speculating banks. There is no latitude nor longitude now with the pile of money they've created. A dollar persisting down will provoke real inflation that FED will have to address by raising rates. How good is that for the stock market, FED? Gold will rise with the mark. When it corrects, so will gold. I had assumed that the short term move starting a month ago was close to exhaustion, but the mark gapped out on the upside today, negating that view. I hate to overweight in gold stocks but conditions are putting uncomfortable force on me. That uncomfortable feeling definitely implies more upside.