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Mix-Ansicht- Gold: A Sustainable Rally? - Albrecht, 02.07.2000, 09:34
Gold: A Sustainable Rally?
Hallo zusammen,
beiliegend übersende ich Euch einen kleinen Beitrag zum Dollar/Gold Verhälnis.
Quelle: http://mindit.netmind.com/go/10001/24697417/9198980/184/1
A Sustainable Rally?
Two weeks ago, we reported on the fact that a Fed economist, Mr Dale Henderson, had trotted out a"revision" of an idea he
first talked about back in mid 1997, namely that all the Central Banks really should sell ALL their Gold. Last week, we reported on
President Clinton's decision to declare a"National Emergency" in regard to Russian shipments of uranium to the U.S.. The point
here is that in a"national emergency", the President of the U.S. has:"the power (should he choose to accept it) to do literally
ANYTHING, regardless of any provisions extant in either the Constitution or the law of the land."
It is a well known fact that both candidates in the upcoming Presidential election, Mr Gore and Mr Bush, have signalled that
their campaigns will be substantially based on the continuation of U.S. economic and market strength. Whether Mr Gore and Mr
Bush know it or not (and if they don't, we are sure there is someone in their entourage who can tell them), the continuation of
U.S. economic strength is entirely dependent on an unceasing flow of foreign investment into the U.S.. Americans have no
savings and America is running huge international deficits, which must be covered by foreign investment.
That means that both U.S. investment markets and the U.S. currency must remain attractive to foreigners. So far this year,
even though U.S. markets are down, they are down far less than most other markets. And of course up until recently, the Dollar
was the strongest currency in the world. That has changed over the past month, and not so coincidentally over the past month,
the $US Gold price has embarked on what is looking increasingly like a sustainable rally.
Has This One Got Legs?
Last week, in the wake of the"suggestion" from the Fed economist, the $US Gold price fell and the $US index, after having fallen
for five straight weeks, rose. This week, the $US spot future Gold price hit its highest closing level since February, and the $US
index fell again. And, of course, in the middle of the week, the Fed met and decided to do nothing about U.S. interest rates.
This is Gold's third rally since the"Washington Agreement" of Sept. 26, 1999, but this time, the rally is different from the
previous two. The first two rallies were explosive, they had obvious catalysts (the curbing of European Gold sales in September,
the curbing of Gold mining companies forward sales in February), and they were short lived. This rally is slow, it is steady, and
there has been no obvious catalyst behind it.
In the upcoming issue of The Privateer, we go into detail on why we expect this rally, unlike the last two rallies, to be
sustainable. This has investment implications, not least on Gold stocks, and we go into all that too.
The fundamental antagonists on the world's financial stage are, and have been for decades, the U.S. Dollar and Gold. It should
be obvious to everyone, and it is becoming obvious to more and more people, especially investors and financial administrators
outside the U.S., that American economic prosperity is completely unsustainable for the simple reason that there is no
infrastructure behind it. There are no"reserves" in the form of savings in the U.S., and productive capacity is not being
maintained. The U.S. buys what it needs from other nations. It relies on the unique status of its currency, the world's reserve
currency, to continue to do so.
In the late 1970s, the U.S. almost lost its battle with Gold. It took 20% interest rates to lure the world out of Gold and back into
the Dollar. When the Fed refrained from lifting rates on June 28, Gold surged on anticipation of a lower Dollar. A lower Dollar is
precisely what U.S. economic prosperity CANNOT survive. But as the situation now stands, with ever increasing trade and
current account deficits and no internal savings whatsoever, the only way to keep the Dollar from falling is to RAISE U.S.
interest rates - in an election year - and in the face of U.S. investment markets that are fragile, to put it mildly.
"The final battle was and is always going to be between the Dollar and Gold. We think Mr Clinton has just raised the stakes -
dramatically."
Gold Commentary - June 23
That's how we ended the commentary last week. This week, Gold has risen $US 8.80. It has improved on every chart we post
on this site. It is threatening to break above the $US 290 resistance point which has confined it for a month. It is facing a U.S.
Dollar that is steadily weakening and a Federal Reserve that is on the horns of an excruciating dilemma. It has everything going
for it, except the fact that there is a HUGE vested interest in keeping it tied down.
But Gold HAS been tied down. It has been below its $US 300"floor" for nearly three years now. We think that the only thing that
will keep Gold below that floor much longer is for the U.S. to come out in public and actually sell part of its Gold. And if you think
that may happen, recall the last time that the U.S. did it, in the late 1970s. As is being pointed out by more and more analysts,
present U.S. financial problems resemble the ones they faced in the 1970s. But the"solution", sky high interest rates, is no
longer viable. It is going to be very hard to keep Gold below $US 300 much longer.
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