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

To: Zardoz who wrote (887)	12/20/1998 3:13:00 AM
From: ahhaha	Read Replies (2) \| Respond to of 3558

The tick volume indicates that the market is sensitive to the upside. Given a reason for sellers to stop supplying sufficient supply, a little buying runs up price. The state is there is for any news to ignite it. I suggested Japan because it is Japan that is the only reason there is a residual deflationary drag on the world economy. Japan needs to print money as I have been saying for many months. Sooner or later they will. They're still trying to get around their structural problem which by the way isn't caused by the banking situation. That's just an effect. The problem for the hundredth time is that Japan persists in clinging to its neo-mercantilist economic structure. They can't compete against the cost of labor of the new tigers, so they have to transform their economy away from low return unskilled labor heavy industry. They have unutilizable capacity which was built decades ago to take advantage of our over-priced labor. That's been done. Can't beat that horse any more. They have to get into high tech and other new industries. The current plan is fiscal stimulus, a shotgun approach, a hodge podge of psychological upliftings. That won't do it. It just pumps up briefly the old regime of mercantilism and it does even that too slowly. They need to provide tax incentives to stimulate new industries and they need to stimulate domestic demand by printing yen. That is disjoint from interest rate policy. The domestic demand would go to other Asia like China rather than to the US. When it goes to the US via neo-mercantilism, you have the previous virtuous cycle recycling of dollars into T-Bonds mechanism in high gear, but it now has the unsalutary effect of encouraging the base of money securing the teetering bank debt situation to flee to safety. Therefore if Japan persists in the current charade, there will be another melt down a la this summer and it is coming soon. This time, with the Japanese savings pledged making a run out of Japan, you got a major problem. You might even have a panic of conversion of yen to gold. That is improbable, but what is probable is that the BOJ would be forced to print yen to cover the margin call. When one of the world's most efficient economies which has been in pseudo-deflation, suddenly reverses direction you will see a monetary effect. In light of FED fear driven money pumping you then have world money growth having a tangible monetary effect. It's all psychology, but it takes the form of the bidding up of commodity prices. Out of nowhere within three months you have a mini-boom happening on a worldwide basis where everyone tries to come on stream simultaneously and they all try to grab a decades long constrained ability to supply commodities. The commodities have to be allocated by price, higher price, that is. We are not in a deflation state. We are not in a disinflation state. We are in a transition to an intermediate reflation up to the major structural intrinsic deflationary down trend which will be in position until most of the nations achieve labor rate parity. There are still large quantities of people willing to work cheaply. As long as that is true, the down trend will persist. We have diverged so far away from the rate of downtrend that there is plenty of room to reflate back up. It is that fact that the FED is mistakenly using to pump up economy that would prefer to slow to weed out the inefficient. The price we will all pay is that economies reflate rapidly, the slack is eaten up quickly making policy options fewer, and the FED ends up have to tightening as the lower cost labor is coming on stream. This amplifies the world recession that occurs when liquidity must be removed for monetary reasons just when it is needed to support output. The money enables American labor to inflate when the poor peoples coming on stream with a competitive labor cost get socked by the FED having to restrain our will to inflate. The slowdown hurts them more than it does us. It's called fairness. This isn't coherent: "So you are suggesting a baseline economics and a daily tick combo, which is in essence daily TA of trends. But yet you then profound traditional TA as uninformative." TA has nothing to do with what I do. I try to measure supply/demand relations. Traditional TA purports to do this in some unknown way, but I've never encountered anyone doing TA that can even define the terms demand or supply. It's even hard to find anyone who understands how the specialist mechanism works. Tick volume analysis on ABX is not causally connected to any economic time series data. That is always the case when a market is sold out. But surprisingly in the subtle action of the price random walk there are states developing which if there is a psychological event, then you get dynamic change. Though the seeds exist there is no a priori expectation that they will sprout. State dynamics is the only scientific way to assess potential transitions from equilibrium. In comparison traditional TA is entirely useless since it is only an attempt to measure one random process against another. The correlation is, random. You have been trained by price to believe that price predicts price. Thus in a downtrend, the only indication that you have that the trend is changing is that some moment of price is changing sign. In random processes sign changes are randomly distributed, so the correlation coefficient is zero. No information in TA. You have to build a model on the random processes thesis, since that is how the world works. Everything else is just epicycles.