Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG -- Ignore unavailable to you. Want to Upgrade?

To: Giraffe who wrote (295)	12/16/1998 11:50:00 AM
From: Zardoz	Respond to of 48092

If CPI RATE is low relative to an increasing M2 rate, and can be held low, than gold decreases in value relative to an increasing {growing} economy. If the USA was in a deflation state as people suggest {not I} than growth will oustripe inflation, and the economy will expand, and thus gold will decrease in price {and oil? No} That's from this chart: mypage.direct.ca This shows that Gold, and M2 are uniquely tied, as the M2/Gold line is really a smooth line. Yes M2 is in Trillions, but Gold the smaller number would magnify the trend. The key is to look at 1994 to 1996 area. Where M2 was increasing and so was Gold {small rates} But the (CPI*Au)/M2 rate was decreasing. {see other chart} And the ratio of M2/CPI increased. mypage.direct.ca So if the FED has pumped {see higher M2 data of 1 month ago} But has now back off with the most recent annualized rates: stls.frb.org Which suggest a tightening bias, then CPI will not increase, M2 will be low {maybe positive}, and Au will decrease. This chart: mypage.direct.ca Shows that GOLD has gone down relative to other currenies other then the USD. But because Gold is in USD it appears more expensive. It is nearly as low as the August low.