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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: dospesos who wrote (3031)	1/12/1999 10:31:00 PM
From: Bill Murphy	Read Replies (1) \| Respond to of 81176

Tom, You are the man on this one. I defer totally to you. I brought it up vis-a vis Crudele's comments because of what I wrote in the Jan. 7 Midas. Look forward to hearing from you again. Bill lemetropolecafe.com -Jan.7 Yesterday, I had a wonderful conversation with internationally renowned and London based, Teddy Butler Henderson. "Teddy", one of England's respected elder statesmen, has a very highly regarded investment service and is very well plugged in with the investment community in Europe. You will get a kick out of this story. I sure did. "Teddy" had lunch in London with Alan Greenspan in 1971. Greenspan had his own consulting firm at the time. Both "Teddy and Greenspan" were believers in the Kondratieff wave ( cycle ) theory. Greenspan told Henderson that his ambition was to become the top man at the Federal Reserve. Knowing the Kondratieff cycle would be predicting a crash or depression of sorts about the time he would become head of the Federal Reserve, Greenspan told Henderson he could stave it off by various means ( injecting money into the system, supporting the dollar, etc ) and he intended to do just that if his career ambition came true. And you wonder if the gold market has been controlled!!!!! Teddy ( TBH ) has been a believer that the dollar is in deep doo doo and, that while it has been weak recently, it has more downside to go - about 5% more against the Euro. Guess who wants it that way? Contrary to what you might think, it is Alan Greenspan, according to TBH. Teddy says that Greenspan knows that he had to take certain steps to keep the bubble going ( a la the conversation he had with him 28 years ago ). Greenspan knows that our trade deficit is a problem and that our manufacturing sector and real world export sector of our economy needed help. Thus, he made the decision some time ago to work on getting the dollar down. To keep our bubble going, he needed to have this sector of our economy become more competitive. Solution - lower dollar. Now, this does not make the euro crowd very happy according to TBH. Their reserves are in dollars and with the new start in EMU, they do not want economic problems for themselves. Today, for example, their were reports over a French, German clash over farm policies. A lower dollar can only exacerbate that clash. At the same time, the EMU wants a strong euro in general. But they want it that way because of a strong economy, not a weak one. In that light, TBH feels that they will up the gold backing of the euro as a reserve at some point in the future. Interestingly, we reported talk of this to you some time ago and today's ECB comments are very encouraging. Teddy feels that the ECB will break ranks from Greenspan in his efforts to keep the price of gold down, referring to Greenspan's comment last July to a congressional committee, " Nor can private counter parties restrict supplies of gold, another commodity whose derivatives are often traded over the counter where central banks stand ready to lease gold in increasing quantities should the price rise". It is this breaking of the ranks that will spur the price of gold to much higher levels according to TBH. TBH has been a big fan of the US stock market and has his followers heavily invested here ( while hedging the currency risk ). His reasoning is the strong U.S. economy and he knew what Greenspan was up to. He invested in the US equity market with conviction ( and with the help of his 28 year old information ) knowing that Greenspan would lower interest rates sharply in a pinch. For the future, he sees inflation in the US as workers demand much greater compensation for their efforts, especially as they see this incredible stock market rally. TBH thinks Greenspan will be very slow to hike interest rates in response to this inflationary threat, citing previous false alarms of inflation. However, that growing U.S. inflation is the other reason TBH is bullish on gold. His long term U.S. equity outlook is not a rosy one, however. TBH sees the Greenspan induced bubble blowing up by August. Sometime before then, he plans to advise his clients to bid sayonora to Uncle Sam and our stock market. Sounds a bit like Eric Barande.