Forum Archive Index - February 2004

["Kerry Dobson" <croca@ozemail.com.au>]

Brian Bloom also has a couple of interesting recent pieces on Gold Eagle.

In the first speculative piece
http://www.gold-eagle.com/editorials_04/bloom020404.html
he argues that international debts, such as that of the US, are unlikely to
be called in because of the threat this would pose to both debtors and
creditors by undermining the interdependence of the globalized economy.
"Significantly, George W. Bush was 100% correct that Saddam Hussein
possessed weapons of mass destruction - only the weapons had nothing to do
with Nuclear Bombs or SCUD missiles, and had everything to do with the
potential for Hussein (and others like him in the Middle East) to destroy
the entire International Financial Infrastructure by undermining faith in
the US Dollar."
The quid pro quo for the creditors facing decreased returns from a weakened
US dollar: continuing oil price increases and a moratorium on energy
substitution (as evidenced by the scuttling of the Kyoto protocols).
To avoid deflation, the US government would stimulate investment directly
through its Space Program ( an interesting variation on Keynes), whilest the
US consumer's standard of living would "tread water".
Bloom sees the gold price being capped at about $US535/oz (still offering a
good return and insurance against any international zusammenfallen). Silver
he sees at $US15/oz (based on a historical !:35 ratio to gold) with a
possible shortterm spike to around $US60 to drive out the speculative
shorts.

In Friday's TA paper
http://www.gold-eagle.com/editorials_04/bloom020904.html
Bloom looks at the supposed current bull market in equities, concluding
"the secondary Up-leg in the Primary Bear Market in equities has given way
to a renewed down move".
the arguement is amply supported by graphs.
Silver (sludge?) again receives an honourable mention.

The first piece, a reminder of the inexorable connection between economics
and politics, particularly recommended.
Best wishes.







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