Forum Archive Index - February 2004

["Baa Baa" <baa_baa@hotmail.com>]

Been waxing as bit here too ... 
http://www.capitalstool.com/forums/index.php?showtopic=4783&st=20&#entry238613

. The factor is that the USD is the global reserve currency with accounts 
for 80% of all world trade. Another factor is that liquidity (ergo USD paper 
and USD credit) is controlled largely by USFed. Their current policy of 
generating excessive credit and paper USD's is a selfish response to an 
ailing US economy, in spite of the flow-on effects on USD linked currencies, 
which appreciate and compromise trade, and balance-of-trade. Moreover, it is 
the velocity of money, and the volatility this creates in interest bearing 
paper. Massive lurches in world economies are occuring in unprecedented 
short timeframes. The first key of the gold bull is when Gold shifts to 
having monetary/currency characteristics as we've seen recently. The second 
shift is when non-US countries realise they have to protect their own ecnomy 
in response to the pressures created by the US economy/monetary policy 
-ergo, competitive debasement and trade tarrifs. Precious metals (and 
commodities) accelerate price gains in this monetary environment. The third 
key wave is when the Fed policy reverses, -ergo interest rates begin to 
increase and the signal is put out that the US wants a higher return on all 
those cheap assets sold into the world. The poor over-leveraged US domestic 
economy gets a pasting, the true US economic fundamentals of record 
liquidity and unsustainable debt are exposed and fear takes over. Fear is 
good for precious metals. It might not be a happy world though.

--------
Also;

I think that the next phase of the gold bull ergo-competitive debasement, 
will be obvious to detect. The indicator will be the Gold price rising when 
measured in non-US currencies. This is not the case currently. Arguably 
even, the US denominated gold bull is not confirmed until a monthly close 
over 420.

Personally I think we have a decent POG correction here, right now with 
further to go, to freshen the USD by allowing short profits to be taken and 
to ease the concerns mounting in non-USD economies. Following that, the USD 
slide resumes / continues, but non-US economies take up alms and competition 
begins in earnst. To my eye, the Euro is the sucker at the moment (depending 
on perspective), i.e. it looks like holding the global inflation baton as it 
is the least likely to respond quickly with so many decision makers 
involved.

Anyway, I think it's prudent to load up on physical at this juncture and as 
soon as the US and particularly the non-USD POG charts perk up, pile into 
miners and explorers and ride out the next upleg.

----------
And, on the HUI ... 
http://www.capitalstool.com/forums/index.php?showtopic=4707&st=20

BG blurb; MrHanky, those BGO charts ... they're showing a front runner stock 
wedging tightly into a point of indecision. The support (buy side) is clear 
and appears solid around 3.0, so
QUOTE  If entered here, keep stop just under that last low @2.90 for a try!

seems a good entry call imo.

The other key point of indecision is not chart based ... it's the long 
awaited Kupol results, of which some would argue is a key to the basis of 
the run from 0.95. A bad result would wreck the chart, but conversely a good 
result would make a buyer at 3.00 very happy.

IMO, the weak POG and potential for lower, is a good time to accumulate BGO 
on weakness, but to have some cash in reserves to continue accumulating if 
the POG goes even lower prior to Kupol results being released. The ideal 
combo for BGO would be a rising POG and a +ve Kupol result. Buyers around 
3.00 in that case would be laughing.

Personally, I think we'll get more BGO under 3.00 because I'm picking the 
POG has more downside yet to come, ergo USD more upside. It's a close call 
right now though. Fingers on triggers.

---------
Later aligators,
BAA

_________________________________________________________________
Check out the Xtra gaming servers at  http://xtramsn.co.nz/gaming !


----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/chat/forum/