<http://www.forbes.com/2003/07/01/cz_bc_0701gold_print.html>
Thanks for the link. It says in part: "Another reason to dump on the metal: the recent strengthening of the U.S. dollar and the lower than expected quarter-point cut in the federal funds rate last week."
First, I have to ask: what strengthening of the US dollar? Stronger compared to what? Compared to ten years ago? Two years ago? Last year? The start of this year?
The dollar is down, down, and down. In what sense is it strengthening? Against what currency or other measure?
Then I have to ask why anyone in their right minds would figure that the Fed would cut its rate any faster than it has. It has only 1% left to go before the rate reaches zero.
Yes, the Dallas Fed has on their site some preposterous ideas about imposing negative interest rates on the economy. But, the reality is that most of these are very impractical and even the Dallas Fed says these arrows aren't very straight. Who knows where they might fly.
This idea that there is excitement to be found in a slow or slowing economy where the tools for stimulus are nearly exhausted is baffling to me. Look at Japan. They have seen their stock market plunge for over a decade from around 20K to around 8K. And their central bankers have had interest rates at zero for a very, very long time.
Recently, a friend sent me a quote from Hemingway who pointed out that the last resorts of desperate politicians are inflating the currency and starting foreign wars. Guess where that leaves Bush?
Regards,
Jim http://www.awdal.com/
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