Board-Ansicht
Mix-Ansicht- Gold -"Fixed" To The Dollar - Albrecht, 17.12.2000, 20:58
Gold -"Fixed" To The Dollar
Gold -"Fixed" To The Dollar
The U.S. Presidential saga is now over, and from all sides comes the clarion call for"reconciliation" and good will so that the U.S. can go forward into the rosy future together, forgetting their differences as all Americans of all political persuasions apply their shoulders to the wheel and PUSH! But (with apologies to Mr Jefferson), some Americans are indeed more"equal" than others. The American who is now expected to do the REAL"pushing" is Alan Greenspan. As U.S. stock markets falter yet again, and as Wall Street confronts a future which does not include a"Christmas Rally", the chorus is rising."Lower interest rates - dammit - or we'll all be rooned!!"
What Wall Street refuses to consider, of course, is the U.S. Dollar. Most Americans take it for granted that the Dollar is the world's premier currency. Almost all of them take it for granted that no conceivable set of financial circumstances could change that. Mr Greenspan knows better, as he should, since he is the one man who, more than any other, has been responsible for making sure that the Dollar has retained its premier currency status over the past 13 years.
Mr Greenspan knows that the entire U.S. economic boom, which has been going now for almost a decade and which is now showing unmistakeable signs of faltering, has been dependent on the status of the Dollar. He knows that Americans have long since stopped saving, and now the U.S. is entirely dependent for its continuing"prosperity" on foreign investment. He knows that the level of foreign investment required to continue this"prosperity" will not survive a lower Dollar. And he knows that if he lowers rates to"save" the stock markets, he may well kill the Dollar in the process. Mr Greenspan has a problem.
Regardless of this problem, Mr Greenspan chose to speak at a New York Bankers' conference on Dec. 5 and chose to imply (or at least he was interpreted as implying) that the Fed was looking favorably on the prospect of lower U.S. interest rates in the new year. That speech temporarily"saved" the stock market and even the Dollar recovered. But that was ten days ago. Since then, the U.S. markets have resumed their decline and, even worse, the U.S. Dollar is now lower than it was when Mr Greenspan made his speech.
And so is Gold. Now, the Americans who are clamoring for lower U.S. rates neither know nor care what the level of the $US Gold price is. Nor do the vast majority of those who were watching the recently concluded Presidential election drama. But Mr Greenspan cares, because he knows that there are large numbers of people (including large numbers of Central Bankers) OUTSIDE the U.S. who DO care about the $US Gold price.
Americans don't care about the Gold price as long as it doesn't move. If most Americans consider Gold at all, they consider it as an"inflation indicator". And if Gold isn't moving, there is one more indicator that there is no"inflation". If there is no"inflation", why are interest rates so"high". And if the stock markets (which Americans REALLY care about) are down, why the heck doesn't Greenspan get off his fanny and DO something about it?
Americans are amazingly complacent about the state of their financial system. The Nasdaq has tanked, the Dow and the S&P 500 have been flat for nearly two years and both are weakening. Even so, most Americans are still hanging on in the"confident" expectation that the Fed will fix the markets up next year. To disturb that complacency, the Dow is going to have to sag below the 10000 level, and stay there.
If that happens, attitudes will change. If it happens DESPITE Fed rate cuts in the new year, attitudes will change very quickly. The extent to which Americans depend on Mr Greenspan to preserve their wealth is frightening. If anything happens to diminish or destroy his aura of infallibility, the effect would be devastating. Americans would be pitched headlong into the economic and financial unknown, with nothing to guide them and nothing to depend on.
And, as it has been throughout the past five years, the one phenomenon that would blindside Americans (and almost everyone else) more than any other is a concerted rise in the $US Gold price. We don't know when it will happen, but when it does, it will almost certainly happen in concert with falling U.S. markets AND a falling U.S. Dollar.
In fact, a surge in the $US Gold price is all that would be needed to CAUSE a fall in both the markets and the Dollar. Through all the gyrations on all the markets, including the Dollar market itself, Gold has remained quiet. When it did come to life, late in 1999 and again early in 2000 - it was very quickly stuffed back in the bottle. Right now, everything is coming together to cause another spurt in the Gold price. But still the control remains.
As has already been demonstrated this year, a concerted fall on U.S. stock markets has not erased investor complacency. Niether has some sharp falls in the Dollar. But now, Mr Greenspan has to try to rescue the markets while not causing a big Dollar sell off AND not causing the $US Gold price to come to life. We don't think he can do it, but it will be fascinating watching him try.
Aus"The Privateer Goldpages", 17.12.2000
Wir sind gespannt!
Gruß
Albrecht
<center>
<HR>
</center>
Thread gesperrtgesamter Thread:
