Forum Archive Index - February 2004
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[sharechat] Cross Posts from Capitastool.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
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