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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (811)	11/19/1998 12:04:00 AM
From: The Fix	Read Replies (1) \| Respond to of 3558

Barrick Gold Corp - Dividend declared Barrick Gold Corp ABX Shares issued 375,927,171 1998-11-16 close $32.25 Tuesday Nov 17 1998 Mr. Vincent Borg reports Barrick Gold's board of directors has declared a dividend of nine U.S. cents per share, payable on Dec. 15, 1998 to shareholders of record at the close of business on Nov. 30, 1998. fIXER

To: ahhaha who wrote (811)	11/19/1998 2:04:00 AM
From: ahhaha	Read Replies (2) \| Respond to of 3558

I was challenged in my view of the growth of the aggregates, so I decided to review the data. I got the St Louis Fed's data base "Fred" and did a residue analysis of M2. As I reported M2 has been growing about 15% since July. If the period is taken back to last December, the rate is about 7%. An examination of the last ten years data shows that in Jan '87 M2 peaked and started a jagged descent not significantly bottoming until Jan '93 and Jan '95. Since '95 M2 has grown faster than any time in all history. Currently the growth is parabolic. That means the growth change is increasing, it is accelerating. The moves in M2 are correlated to the stock market rises and falls and also to the movement in gold price. The conditions that create extra money, create advancing stock prices. When extra money can't go into creating circumstances of greater corporate profitability, it goes into greater manufactured goods and services prices. There is a lag between extra money which goes into prices and prices. It took 6-7 years for FED erring on the side of restraint to break the previous inflation cycle. This means that the 21% interest rates of 1980 didn't get conveyed to M2 slowing of growth until 1987. Since the FED was pursuing the wise course of aggregate targeting, M2 slowed to the rate of growth of real output. The FED reversed this policy in 1993 and/or 1995 and has been providing reserves which has supported an M2 growth unequalled in history. Using the 6-7 year criterion no earlier than '99 and no later than '02 we will start seeing a rapid increase in inflation. Given the quickening in the current M2 growth the occurrence will be earlier, say late '99. This is set in stone. Nothing can be done about it short of sending the entire world into a recession that it will be going into anyway. What would cause aggregate demand to recess would be FED tightening now. As anyone knows that is the last thing they would do. It is the other side of the coin of counter cyclical policy that they claim to practice, but it is the side they can never practice because they are weak and spineless. In the final analysis they will have to just disappear from public view and let the free market raise interest rates just like what happened in 1980. It was Volcker who got credit for "whipping inflation then", but he didn't do a thing. He went into hiding. Few ever knew that it was the free market that raised the rates, not the FED, and certainly not Volcker. The FED just stopped feeding extra reserves into the system. At that time they realized that creating money to keep rates from rising actually was causing rates to rise! It was rational expectations effect of more unutilizable money. Since that "inflationary" psychology doesn't exist now or at least not to the extent of then, it is believed that extra money doesn't encourage rising prices. However, at whatever level the FED marks to market the federal funds rate, the interbank intensity of demand causes the nominal rate to constantly exceed the mark. You see this when the FED enters the market daily to do RP purchases. The fed funds rate is always above target. You didn't get that when we had intrinsic deflation, i.e., when we had aggregate targeting, money growth commensurate with output growth. I have heard quite a few specious explanations of this, none of which are worthy of repeating. Regardless of rationalizations the fact remains that M2 growth currently persists more rapidly than output. There is no magical deconstructing of this money. It doesn't just disappear. There's more money per each unit of output. It reappears after the lag time. The lagged time is the period during which the elastic state embedded by actions of the previous period are changed to inelastic. That means a given quantity of money causes a fixed quantity of output. Trying to exceed the maximum output by additions of fiat created money is impossible. This is independent of the level of output capacity except during periods of recession. Whipping the horse won't make it go faster because it's all out. We aren't there yet, but once the FED left the hard won discipline, they opened Pandora's box. They always do this under the best intentions of Humphrey-Hawkins, but the outcome is a nastier recession than what would have occurred. Before that happens the governors will have to become more freaked out about inflation than they are about some imagined bank threat. Given the pure money they're creating, they won't have long to wait.