On 6/14/06, Eugene Coyle wrote:
The basis for the WSJ's headline and view is that the markets are going down because interest rates are being ratched up by the world's central banks. And the central banks are doing that because growth is so strong. To quote:"Many economists now think the broad reversal in the price of stocks, bonds and commodities like gold and silver is less a warning signal of an economic downturn than a consequence of the ratcheting up of interest rates by the world's central banks. Indeed, the central bankers' concern is the reverse of a slowdown: that growth may get too hot and could contribute to an upward spiral of prices -- or inflation." Doesn't make sense, does it? If the central banks are correct, then it is time to BUY gold and the rest. Or am I not looking beyond enough valleys and peaks? Should we SELL, because there is a boom? Or BUY because because there is a boom?
in one view, the CBs are encouraging recession or slower growth to fight inflation, in which case it doesn't make sense to buy gold. The Fed claims it's engineering a "soft landing," which usually means a recession. I'm shorting death futures (viatical settlements) myself. -- Jim Devine / "Mathematics has given economics rigor, but alas, also mortis" -- Robert Heilbroner.
