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 : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: scotty who wrote (29553)	3/8/1999 11:57:00 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 116762

No inflation?.....Last CPI was .06 ( 7.2% annualized )....Greenspan said a couple of weeks ago that commodity prices are unlikely to fall further. Sure, energy prices are low (not for long) but what about other prices?...20k cars, give me a break...Bought any health insurance lately? Groceries?....PPI comes out this week, could be on the high side.....scotty Scotty, there is a difference between what is reality and what AG wants the market to believe. The Fed fears deflation as much, or more, than inflation. And if people believe that the other shoe has yet to drop on the CRB, there will be continued unwillingness to take business risk. Continued devaluations in foreign economies that produce commodities such as Latin America stand to put HEAVY pressure on the CRB. Why? Because these nations rely heavily for annual revenues on the income brought in by the sale of commodities. The only way to maintain revenues is to increase the production of these commodities, regardless of the profitability in order to increase market presence and beggar their competition. These countries have considerable debt and they have to pay it off somehow. Also, should the European economy go into recession, that will put a crimp on demand for commodities as well. There is a battle ongoing between European gov'ts and the ECB about what monetary policy should be. If the ECB continues to maintain their interest rates at current levels, European economies will go into recession and decrease a considerable amount of global demand. That is why the US really desires the ECB to do their part to sustain economic recovery and lower interest rates to maintain their ability to absorb present levels of commodity production. It doesn't look like they are being very successful. JMHO, but AG comments are just as important for what he says as for why he says them. He is the economic cheerleader who provides a semblance of confidence required for businesses to take on debt, import commodities and attempt to sell finished goods. I don't find him particularly convincing with regard to where commodity prices are heading long term. Copper certainly will suffer as more Fiber-optic systems are built to replace traditional twisted pair systems. And silica is a poor commodity to price. Metals like nickel, iron, ...etc, require growth in durable goods orders, and we're not seeing that due to foreign economies present inability to finance capital expenditures. Regards, Ron