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To: Terry Rose who wrote (22116)	10/21/1998 11:37:00 PM
From: bobby beara	Respond to of 116779

TR, your right, the buy signals being registered on many technicians indicator screens may be foolies. bb

To: Terry Rose who wrote (22116)	10/22/1998 4:45:00 AM
From: Zardoz	Read Replies (6) \| Respond to of 116779

"Now that some of the liquidity is gone and the lack of money (credit) required a surprise rate cut by Greenexpand my question is where is the money coming from to resurrect this bull?" Where did the money come from during the last leg of the bull market? Wealth is never created, nor destroyed, but is transferred from person to person; and product to product. Many call it growth. Growth of an economy requires more capital, and more capital requires more money. BUT creation of money, doesn't make growth. The bond market is a magnitude larger than the stock market, and the currency market see a flow of 900B-1.3T USD worth of capital a day. By lower Fed rates, this removes pressure on short term bonds. This lower yielding money looks for higher returns, and at what is higher risk. Creation of money can cause excessive inflation. But the rate of the excess is the key to CPI style inflation. By mitigating the money creation, you can limit the inflation. This money {M2} is imparted to the masses in the form of bond repurchases. And than is free to flow to whatever investment. It is this creation of money that is tantamount to gold's valuation. To much excess production of money, and the price of GOLD rises, to little and the price of gold falls. This is why the XAU & Gold has been suffering this week. Greenspan stated after the 1987 crash that liquidity, and monetary flows are the key to the economy. After ever FED speech, he has said "Watch M2" to know where the economy is going. This is why the economy had it's fall, and why gold is an under performer. This is why the XAU & Gold got sold off. With the recent back track of the bonds, liquidity in the market place has been created. The bonds sold down, as the money fleed to the markets. But what of the excess M2. If there is any, this is what will create a market for Gold. Every majour brokerage house has economists who understand the markets better than you and I. So they know that in a disinflation economy, M2 excess is high only to stimulate growth. If inflation was increasing the effect of over stimulation would result in a gold spike... {see gold charts of 1978-1982, and compare M2-rates} The loose policy of printing excess money of that time lead Gold to spike. The new Paradigm is a model of controlled monetary policy. This means that Greenspan can effectively control the economy based on monetary inflows. But the question is, will there be excessive M2. {We'll know Thursday} Last weeks data suggested a +12 Billion number. But that was done primarily to add short term liquidity to the system. If there is a substain increase to M2, than Gold will continue it's climb. But he's the killer. Knowing it's Greenspan, knowing he lowered the Fed rates, and knowing he lowered the FED Discount rate {which is rare} he has more than likely decided that the liquidity needed to be added to the system is off a secondary nature. Meaning not more CASH, but more control of the cash. If there is a higher than +10 Billion in M2, UP for gold, all else, and probably down. Most traders are selling the gold futures, and gold equity today, to lock in profits. This is why you seen the "on close" selling today. If the rate is low, than you can assume that the US Dollar will rise in the following weeks, which will add the second killer of gold. The bond market is showing signs of stability, and Greensapn wanting to fight inflation, will not want to add loose money liquidity. BUT: "If you still belief in GOLD, than you should buy BEFORE THURSDAY IS OVER!" Cause if I'm wrong, friday will be a BIG DAY FOR GOLD. The surprise rate lowering was to done to lower the discount rate.

To: Terry Rose who wrote (22116)	10/22/1998 2:09:00 PM
From: Alex	Read Replies (1) \| Respond to of 116779

Market, Y2K woes help gold lose tarnish By Tony Munroe/Boston Herald For people who lived through the Great Depression, gold was considered the only real safe investment. But over the last 20 years, investing in gold or other precious metals has fallen out of favor, as stocks and bonds have performed phenomenally well, and a new generation of investors has not yet lived through a prolonged bear market. Prices of gold and precious metals have been flat accordingly. Low inflation rates over recent years have also conspired to keep down the price of gold - which was long used as a hedge against inflation. ''The gold price doesn't appear on TV anymore,'' laments John Meury, senior vice president for precious metals at MTB Bank in New York. But Meury still likes gold. Thanks to an uncertain stock market and worry over the year 2000 computer problem, gold is enjoying a small comeback, with prices up about $20 an ounce in recent months. MTB Bank, which supplies coins and bullion to retailers and wholesalers, has seen demand double from a year ago for buillon, and grow even more for one-tenth and one-quarter ounce gold coins, Meury says. ''The survivalists seem to be out in force again with this year 2000 thing. They're probably filling up their bomb shelters,'' Meury jokes. ''People are extremely scared that they're not going to be able to do anything that day,'' Meury says of Jan. 1, 2000. With gold trading at low valuations, precious metals are attractive, Meury says. Silver has similar investment characteristics as gold, while platinum is more an industrial commodity than financial instrument. Meury likes all three. The pluses: ''It's convenient. It's liquid. Now it comes in so many different sizes and metals. And they're portable.'' He says metals should be seen as a diversification vehicle, accounting for just a small share of an investor's portfolio. And investors should diversify their holdings, perhaps with platinum and silver, he says. But Susan Kaplan, president of Kaplan Financial Services in Wellesley, says gold's time has passed, as evidenced by the lukewarm reaction of the precious metals markets to the recent stock market turmoil. ''Normally, gold would be shooting through the roof and would be $800 an ounce again,'' Kaplan says. But many countries now back their currency with greenbacks instead of gold, quelling demand. And inflation is far less a worry right now than deflation. Besides, Kaplan says, when one invests in gold, they get ''no interest. No dividends. No 5 percent in the money market. No nothing.'' And investors must pay to store their gold. Gold is so cheap right now, says Fred Schultz, president of Beacon Fidciary Advisors in Chestnut Hill, that speculation is the only reason to invest in it. BT Info Center EMAIL ALERT Sign up now for our free email alerts NEWS TIPS Send us your local business news HOMEPAGE Click here to make this your starting point on the web <Picture> <Picture> <Picture>Back To The Top <Picture>©1998 Copyright info. All rights reserved. Terms of Use. businesstoday.com