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also look at us dollar ver gold
gold is really up big time
fidelity select gold up 176% in 3
years
Ben
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>
----- Original Message -----
<DIV
>From:
<A title=mr.ira@xxxxxxxxxxxxx
href="">mr.ira@xxxxxxxxxxxxx
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Tuesday, January 06, 2004 1:54
PM
Subject: Re: [RT] Fwd: bond market
forecast for 2004
Just adds to the cost of domestically producted
products as well as Ag products.
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
EarlA
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Tuesday, January 06, 2004 10:47
AM
Subject: Re: [RT] Fwd: bond market
forecast for 2004
Bigger problem as I see it is very near term ... prices of NG and CL
continue to trend higher placing a very real tax on the economy and
consumers. Energy prices have been moving inversely to the US$. If the
Fed/Admin/Market don't raise interest rates to support US$, energy prices
will continue to rise creating a major political issue for the guys running
things.
Earl
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
<A title=mr.ira@xxxxxxxxxxxxx
href="">mr.ira@xxxxxxxxxxxxx
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Tuesday, January 06, 2004 11:08
AM
Subject: Re: [RT] Fwd: bond market
forecast for 2004
Cycles have a way of expanding and contracting. Your
assumptions could verywell be right. I see some other factors
that might impact the movement inthe bond price. The CRB is
moving to new highs almost every day. I have aprojected high
around 296. Gold has not seen its peak as yet. The fall
ofthe dollar means that everything we import will go up in
price. Housingprices are rising at a rate of 20% per year in our
area. Health care andinsurance prices are rising. Gasoline
and natural gas are still nearall-time highs. The government has
a trillion dollar debt to refinance andhas to come to market for
that. that debt is increasing every day and thatwill provide
competition for dollars. All of these factors foretell
ofimpending inflation, no matter what the government
says. Can they holdthe bluff until after the
election? A good question. How does thegovernments stop
inflation? Raise interest rates.Just some thoughts from the
other side of the coin. Ira.----- Original Message
-----From: "topos8" <<A
href="">topos8@xxxxxxx>To: <<A
href="">realtraders@xxxxxxxxxxxxxxx>Sent:
Tuesday, January 06, 2004 9:45 AMSubject: [RT] Fwd: bond market
forecast for 2004--- In <A
href="">gannsghost@xxxxxxxxxxxxxxx,
"topos8" <topos8@x...> wrote:THE
U.S BOND MARKET IN 2004On December 29, 1982, with long term U.S
treasury bonds yieldingclose to 11 % and the bond futures trading near
60 (basis newcontract) I published a long term bond market
forecast. This wassent to subscribers of my newsletter, The
Cyclic Forecast, whichceased publication in 1983.Not once over
the past 20 years have I been tempted to alter theconclusions reached
in that forecast, but now might be a good time tobring it up to
date.The thesis of that forecast was that a new long term cycle in
bondprices and interest rates had begun at the September 1981 peak
inlong term interest rates when the 30 year treasury bond was
yielding15.30%. I expected the new cycle to evolve in a way similar to
thecycles that had begun at the two previous long term peaks in
interestrates in 1857 and in 1920.I quote from the December,
29, 1982 forecast: "If the bond marketfollows the average of these two
historical cycles, then bond pricesshould be in a generally rising
trend for the next 30 years. Thepeak in bond prices and the low
in long term interest rates is notdue until the year 2010...long term
bonds are once again (a) highreturn, long term investment vehicle and
will remain so for ageneration to come."Over the past 20 years
I have often reiterated the conclusions ofthis forecast in
conversations with my consulting clients. In fact, Ihave often
asserted that before this bond bull market ends the yieldon long term
treasury bonds will be BELOW the dividend yield on theDow industrials.
As I write this the U.S. treasury long bond yieldsabout 5.10% while
the Dow's dividend yield is about 2.00%.Needless to say I think
that there is yet another big upleg in longterm bond prices ahead of
us (and probably another big downleg instock prices). My current
estimate is that the long bond willprobably yield around 3.50%
sometime in 2008 while the Dowindustrials will then show a dividend
yield of around 4.00%. At thatjuncture a new 20 year bear market in
bonds prices will begin.One way to get a glimpse of likely bond
market trends for 2004 is tomake use of the historical averages of
price and interest rate trendsduring the bull market in bonds that
began from the 1981 lows.First of all it is probable that the June
2003 top in bond prices(123 in the futures and a yield of 4.14% in the
long bond) was a topof importance comparable to the tops in 1993 and
1998, the last twotemporary tops in this ongoing bull market. Here's
why.At the October 1993 top bonds had advanced 37 months from
theSeptember 1990 low. The futures had rallied 35 points while
the longbond had dropped from a yield of 9.12% to a yield of 5.77%,
areduction of 37%. At the October 1998 top bonds had advanced
47months from the 1994 low. Futures had rallied 39 points while
thelong bond had dropped from a yield of 8.18% to a yield of 4.65%,
areduction of 44%.In comparison, at the June 2003 top the
bonds had advanced 41 monthsfrom the January 2000 low. The bond
futures had rallied 34 pointswhile the long bond yield had dropped
from 6.77% to 4.14%, areduction of 39%. All of these figures
show that the January 2000 -June 2003 upswing was comparable in these
important respects to theupswings that ended in October 1993 and in
October 1998.The 1993 and 1998 tops were followed by declines
which lasted 13 and15 months respectively. The bond futures dropped 26
points from the1993 top at 122 while the decline from the 1998 top was
about 27points from 135 (adjusted for the change in contract
specificationthat occurred in the March 2000 contract). From 5.77% in
October 1993the long bond yield rose to 8.18% in November of 1994, and
increaseof 42%. From 4.65% in October 1998 the long bond yield
rose to 6.77%in January of 2000, an increase of 46%.If the
precedents established by market action following the 1993 and1998
tops is followed subsequent to the 2003 top I would expect a lowin
bond prices and a high in the long bond yield sometime 13 to 15months
after the June 2003 top, i.e. sometime between July andSeptember 2004.
If the bond futures again drop 26-27 points fromtheir 2003 top at 123
the 2004 low will be in the 96-97 range. If theyield on the long bond
increases 42% - 46% from its 4.14% level inJune 2003 it will reach the
5.88% - 6.04% zone at its 2004 peak.The extent of the upwing in
bond prices which is likely to begin fromthe 2004 low is harder to
estimate, but I shall probably not go farwrong if by assuming that it
will be similar to the average of theupswings that ended at the 1993,
1998 and 2003 tops. If it does theupswing will continue about 42
months, i.e until April of 2008. Itshould carry the bond futures up
about 37 points, i.e to about the134 level. The long bond yield
will probably drop about 40%, i.e to3.50% or so.Carl---
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