news.goldseek.com >> 13 May 2008

Gold versus Industrial Commodities
By: Steven Saville, Speculative Investor
With reference to the following long-term chart*, notice that oil moved back and forth within a wide horizontal trading range between 1980 and the early years of the current decade before finally breaking out to the upside in 2004. Notice, as well, that after it broke above long-term resistance at $40 in 2004 it quickly gained about $15 (37%) and then dropped all the way back to $40 to 'test' its breakout before resuming its upward trend.

news.goldseek.com >> 29 April 2008

Credit Contraction, Economic Bust, and Deflation
By: Steven Saville, Speculative Investor
Members of the deflation camp assert that the large-scale contraction of credit happening within the banking system means that deflation is upon us, even if the money supply is expanding. At the same time, another camp is pointing to the breathtakingly rapid growth in M3 money supply as evidence that hyperinflation is a near-term threat. In our opinion, both camps are wrong*.

news.goldseek.com >> 22 April 2008

The Decade Cycle
By: Steven Saville, Speculative Investor
Since the birth of the floating (sinking?) currency regime at the beginning of the 1970s, the best bull market of any decade has always continued until the beginning of the next decade. To help illustrate what we are talking about we present, below, three charts that represent the best bull markets of the 1970s, 1980s and 1990s, respectively.

news.goldseek.com >> 15 April 2008

Commodities: The Topping Process Continues
By: Steven Saville, Speculative Investor
The daily CRB Index chart displayed below reveals an upside blow-off leading to a mid-March peak, followed by a sharp decline and then a rebound. If we are correct to view the March peak as the intermediate-term variety then the current rebound should lead to a secondary (lower) high within the next couple of weeks and then a decline to a new multi-month low.

news.goldseek.com >> 4 April 2008

The Next Word on Gary North's Claim That the Fed is Deflating
By: Steven Saville, Speculative Investor
In our 31st March commentary we discussed the errors we saw in Gary North's opinion that the Fed is deflating. Strangely, Mr. North took this as a personal attack and launched a personal counter-attack at http://www.garynorth.com/public/3328.cfm.

news.goldseek.com >> 1 April 2008

Is the Fed Deflating?
By: Steven Saville, Speculative Investor
Considering the extraordinary measures* taken by the Fed over the past four months in order to inflate (grow the money supply), the idea that the Fed is purposefully deflating (contracting the money supply) is preposterous. So, what should we make of the small decline in the monetary base?

news.goldseek.com >> 18 March 2008

Stagflation and Other Misconceptions
By: Steven Saville, Speculative Investor
"Inflationary recession" is, we think, a better term than "stagflation". In a world where money can be created in unlimited amounts and counter-cyclical monetary/fiscal policies are enormously popular, most recessions will be inflationary.

news.goldseek.com >> 11 March 2008

Gold Stock Scenarios
By: Steven Saville, Speculative Investor
We have two potential scenarios in mind for the gold sector, the first of which can aptly be labeled "the 1973 model" because it involves the financial markets behaving in a similar fashion to the way they behaved during 1973. To help explain this scenario we've re-produced, below, two charts originally included earlier commentaries.

news.goldseek.com >> 26 February 2008

More on Gold Stocks Versus Gold Bullion
By: Steven Saville, Speculative Investor
The current situation is similar to the final quarter of 2000 in that most gold stocks have become very under-valued relative to gold bullion and, as discussed in the latest Weekly Update, there is a potential catalyst for change in the form of a major upward trend reversal in the US yield-spread.

news.goldseek.com >> 19 February 2008

Gold Stocks Versus Gold Bullion: The Pressure Builds
By: Steven Saville, Speculative Investor
Since late 2003 the gold sector of the stock market has been in consolidation relative to gold bullion, but the rapid widening of the US yield-spread over the past 6 months -- as indicated on our chart by the sharp rise in the TYX/FVX ratio -- suggests that this lengthy consolidation will soon come to an end.

news.goldseek.com >> 12 February 2008

Quick Updates on Coal and Base Metals
By: Steven Saville, Speculative Investor
Large vertical price rises are always bearish beyond the very short-term because they only ever happen towards the ends of rallies. The coal market will clearly reach some sort of top over the coming weeks, but there is no way of knowing whether it will be a short-term or an intermediate-term peak (it will almost certainly NOT be a long-term peak).

news.goldseek.com >> 5 February 2008

The Sub-Par Performance of Gold Stocks
By: Steven Saville, Speculative Investor
From our perspective and the perspectives of many other observers of the gold sector, the generally lacklustre performance of most gold shares over the past 6 months in the face of a relentless advance in the gold price certainly qualifies as unexpected.

news.goldseek.com >> 29 January 2008

A Stock Market Bottom
By: Steven Saville, Speculative Investor
The first chart shows the most recent two occasions when the number of new lows on the NYSE exceeded 1100, including this week's event. Notice that the '1100+ new lows day' in August of last year was followed by a strong 2-month advance to a new all-time high, after which the market embarked on the downward trend that led to this week's selling climax.

news.goldseek.com >> 23 January 2008

Bad Economics
By: Steven Saville, Speculative Investor
There's a lot of talk about trying to stave off a recession using a combination of monetary and fiscal stimulus, but you can't stave off a recession that began months ago. And in any case, how could a recession possibly be avoided, or even postponed, by creating more money out of thin air?

news.goldseek.com >> 15 January 2008

Gold Sector Update: No speculative froth, yet
By: Steven Saville, Speculative Investor
A pullback should commence within the next few days, but the fact that the HUI has closed above its November-2007 peak suggests that significant additional gains will be achieved over the next couple of months.

news.goldseek.com >> 8 January 2008

Elephants and Market Stabilizers
By: Steven Saville, Speculative Investor
It is remarkable that even the best financial-market analysts are managing to analyze the on-going debt crisis whilst avoiding any mention of the crisis' root cause. The ultimate blame for the crisis lies at the feet of the central banking community and the inherently unsound monetary system it foists on us, and yet almost all the attention is being directed towards the parts played by private-sector debt creators and financial intermediaries.

news.goldseek.com >> 2 January 2008

Industrial Commodities Update
By: Steven Saville, Speculative Investor
There's a good chance that the price of copper will drop to lower levels over the next few weeks, but the price decline from the early-October high of around US$3.80/pound to the current level of US$2.95 has removed a lot of the short-term downside risk.

news.goldseek.com >> 18 December 2007

What To Do About Gold Stocks?
By: Steven Saville, Speculative Investor
If the HUI drops back to the mid-300s within the next 2-3 weeks then it will make sense to exit any insurance positions (put options, etc.) at that time. Alternatively, if the HUI makes things difficult by rebounding immediately then an opportunity to purchase new insurance positions -- GDX June-2008 put options, for example -- could arise early in the New Year.

news.goldseek.com >> 14 December 2007

China’s Currency Problem
By: Steven Saville, Speculative Investor
Over the past few years China's government has come under considerable international pressure -- primarily from the US -- to upwardly re-value its currency. China has acquiesced to this pressure to a certain extent and has allowed its currency (the Yuan) to rise from a rate of around 8.2 per US$ to the current level of around 7.4 per US$, equivalent to a gain of approximately 10%. A 10% change in the Yuan-per-US$ rate is significant, but with reference to the following chart notice that the Yuan's recent gains pale in comparison to the losses it incurred during the first half of the 1990s.

news.goldseek.com >> 4 December 2007

Exploration-Stage Gold Stocks
By: Steven Saville, Speculative Investor
Last week's NovaGold news underlined the cost issues that are plaguing the gold mining industry. However, while the situation on the cost front is adding to the considerable angst that already exists within the ranks of gold-mining investors and is having an especially adverse effect on the demand for the most speculative gold stocks (the explorers and developers), it is important to keep the big picture firmly in mind.

news.goldseek.com >> 27 November 2007

Industrial Metals in Nominal (Dollar) and Real (Gold) Terms
By: Steven Saville, Speculative Investor
China continues to grow rapidly and consume a lot of metal in the process, but increased Chinese demand was never likely to fully offset the effects on metal prices of reduced Western-World demand stemming from the downturn in the US housing market and the debt-crisis-induced reduction in liquidity.

news.goldseek.com >> 20 November 2007

Which Market Is Wrong?
By: Steven Saville, Speculative Investor
The top section of the following chart compares the BSE/gold ratio (the Indian stock market in gold terms) with the GYX/gold ratio (the Industrial Metals Index divided by the gold price). It clearly shows that both the industrial metals sector of the commodity universe and the Indian stock market trended upward in real (gold) terms from 2003 through 2006.

news.goldseek.com >> 13 November 2007

Stock Market Notes
By: Steven Saville, Speculative Investor
Investors are still acting as if the mushrooming credit crisis will not disrupt global growth to a significant extent. We say this because emerging market equities and the stocks of large commodity-producing companies are holding up reasonably well. For example, the following chart shows that the world's largest listed copper producer (FCX) remains near its all-time high.

news.goldseek.com >> 6 November 2007

Economic Confidence / Uranium Update
By: Steven Saville, Speculative Investor
We've included the following long-term chart of Cameco (NYSE: CCJ), the world's largest uranium producer, to illustrate the uranium sector's tendency to reach an intermediate-term peak during the first four months of the year.

news.goldseek.com >> 23 October 2007

The “Secular Bear” Thesis Re-Visited
By: Steven Saville, Speculative Investor
With the Dow Industrials Index and the S&P500 Index having quite recently made new all-time highs we thought we'd re-visit our opinion that US equities are, as a group, immersed in a secular BEAR market.

news.goldseek.com >> 16 October 2007

Commodities and the Crack-Up Boom
By: Steven Saville, Speculative Investor
Inflation (growth in the supply of money) is by far the most important driver of the current long-term bull market in commodities. Specifically, rapid growth in the GLOBAL supply of money has resulted in the devaluation of currencies relative to commodities. Other asset classes, including equities and real estate, have also benefited from the inflation, but commodities have been the biggest beneficiaries because they commenced the current cycle at very under-valued levels relative to just about everything else.

news.goldseek.com >> 9 October 2007

Fed Rate Cuts and the US$
By: Steven Saville, Speculative Investor
A widely held opinion is that the Fed's decision to start cutting interest rates will put irresistible downward pressure on the US$ over the coming months. Later we'll point out one way in which this opinion could actually prove to be correct, but first we'll present evidence to show that the 'Fed-rate-cuts-will-soon-lead-to-additional-dollar-weakness' argument is not supported by the historical record.

news.goldseek.com >> 3 October 2007

Gold Risks: The COT and the Dollar
By: Steven Saville, Speculative Investor
The Commercial net-short position in COMEX gold futures was 208K contracts as at Tuesday 25th September (the cut-off date for the latest COT report), which roughly matches the all-time high reached in early October of 2005. This Commercial net-short position is, of course, balanced by an equally large speculative net-long position.

news.goldseek.com >> 25 September 2007

Not a Good Time to Be a Government Price Fixer
By: Steven Saville, Speculative Investor
The reason we expected the Fed to cut its targeted interest rate by 0.25%, rather than the 0.50% that it actually decided upon, was the potential for a 0.50% cut to precipitate the events that we have seen over the past four trading days: upside breakouts in key commodities (gold and oil) and a sell-off in the Treasury market.

news.goldseek.com >> 18 September 2007

Inflation: Not a Monetary Phenomenon After All?
By: Steven Saville, Speculative Investor
The weekly comments of Dr. John Hussman regularly contain great insights into the world of stock market investing and should, in our opinion, be read by anyone wanting to improve his/her understanding of what drives the stock market. However, almost everything Dr. Hussman writes on the topic of inflation is flawed.

news.goldseek.com >> 11 September 2007

Gold and the Fed
By: Steven Saville, Speculative Investor
If the October contract closes at $715 or higher then our short-term outlook will change to either "neutral" or "bullish" because a decisive break above $710 will create a technical objective of $775. If an upside breakout occurs immediately (within the next few days) then the risk of a quick breakout failure will be quite high and we will only move our short-term view to "neutral". However, if gold can consolidate below $710 for at least a few days (preferably 1-2 weeks) before breaking above $710 then the upside breakout will have a greater chance of being sustained and we will move our short-term view to "bullish" in anticipation of a rise to $775.

news.goldseek.com >> 4 September 2007

Random thoughts on stocks, debt and gold
By: Steven Saville, Speculative Investor
The stock market correction has been driven by problems in the financial sector, so a signal that the correction had ended would be strength in the Bank Index (BKX) in absolute terms and relative to the S&P500 Index (SPX). The sharp decline in both the BKX and the BKX/SPX ratio during the first three days of this week therefore indicates that the correction is not over.

news.goldseek.com >> 28 August 2007

Thoughts on Currencies and the Gold/Silver Ratio
By: Steven Saville, Speculative Investor
Nobody knows the total extent of the Yen carry trade, but it is probably at least US$500B and could be as much as US$1T. At least, these are the sorts of numbers that would have been applicable prior to the recent surge in the Yen and associated plunges in the investments/currencies that had been purchased with borrowed Yen. Clearly, whatever the size of the Yen carry trade at this time last month, it is a lot smaller today. The question is: has the Yen carry trade now been almost completely unwound?

news.goldseek.com >> 21 August 2007

Stock Market Outlook: Looking Forwards By Looking Backwards
By: Steven Saville, Speculative Investor
Now, even if an important low is put in place in October of this year it won't necessarily mean that the cyclical bull market is intact. It might, instead, mean that the first downward wave in a new cyclical bear market has come to an end, in which case a multi-month rally from the October-2007 low would be followed by a decline to new lows during 2008. The next question, then, is: has the cyclical bull market that began in March of 2003 come to an end?

news.goldseek.com >> 14 August 2007

Inflation and the Base Metals
By: Steven Saville, Speculative Investor
Our main concern at this time is with the next few months, because although the prices of most base metals held up fairly well during the stock market's initial decline the backdrop has recently become markedly less favourable for growth-oriented investments. To put it another way, the things that have recently made us more bullish on gold with respect to the short- and intermediate-terms have increased the downside risk in the base metals.

news.goldseek.com >> 7 August 2007

Gold and Gold Stocks
By: Steven Saville, Speculative Investor
The surge in the HUI/gold ratio during the first three weeks of July never really made sense given that it was not accompanied by a significant improvement in the real gold price (gold relative to other commodities and investments). Interestingly, though, even while gold stocks were weakening considerably relative to gold bullion over the past fortnight the backdrop for gold stocks was becoming more bullish.

news.goldseek.com >> 29 July 2007

The Long-Term Bond Bear
By: Steven Saville, Speculative Investor
Our short- and intermediate-term bond market views have recently become more optimistic because a number of factors should lend support to bond prices over the remainder of this year. In particular, the mortgage-related debt crisis in the US will probably get worse before it gets better, leading to additional demand for zero-risk Treasury debt at the expense of lower-quality/higher-risk debt.

news.goldseek.com >> 10 July 2007

The Commodity “Super Cycle”
By: Steven Saville, Speculative Investor
We are sceptical about the "commodity super cycle" theory that has become widely accepted over the past couple of years. Or, to put it more aptly, we have been long-term bullish on commodities since 2001-2002 and remain so to this day, but we are sceptical about the explanations generally bandied about for the secular upward trend in commodity prices. In particular, we do not believe that the rapid growth of China and India is the primary driving force behind the long-term bull market in commodities.

news.goldseek.com >> 3 July 2007

A Logical Inconsistency of Monumental Proportions
By: Steven Saville, Speculative Investor
Most economists can readily explain why it would make no sense for a government committee to set the price of eggs. They will tell you, quite rightly, that no committee could ever gather sufficient information and react quickly enough to changing circumstances to ensure that the egg price set by the committee was consistently equivalent to the price that brought supply and demand into balance. They will also tell you, again quite rightly, that the price-setting errors that would inevitably be made by such a committee would create problems in the egg market.

news.goldseek.com >> 26 June 2007

Some Stuff About Gold…
By: Steven Saville, Speculative Investor
Since 2001 the real gold price has risen steadily, but the bull market has not been particularly impressive to date. Our thinking is that the really impressive phase of gold's bull market -- the phase where the sheer magnitude of the price rise forces everyone to sit up and take notice -- won't begin until the early years of the next decade. We do, though, expect to see significant additional gains over the remainder of this decade.

news.goldseek.com >> 19 June 2007

Cutting Through the Bull
By: Steven Saville, Speculative Investor
Equities are claims on real assets and the cash flows that these assets generate. As a result, the nominal prices of equities can be, and often are, boosted when excessive growth in the supply of money (inflation) causes the currency to lose purchasing power. To avoid being hoodwinked by the effects of inflation we therefore need to find ways to monitor the stock market's REAL trend (the trend after the effects of inflation are properly accounted for).

news.goldseek.com >> 12 June 2007

The Bearish Bond Divergence
By: Steven Saville, Speculative Investor
As noted many times in previous TSI commentaries, a downward trend in the bond market will eventually take its toll on the stock market. It's a question of when, not if, a downward trend in the bond market will drag equities lower. The 'when' is typically 5-7 months, but is sometimes as long as 12 months from the start of the bond market's decline.

news.goldseek.com >> 29 May 2007

Equities, Inflation and Gold
By: Steven Saville, Speculative Investor
In our opinion is it unreasonable to hinge a long-term bullish view on any investment on positive changes in NOMINAL prices because it's the REAL performance of an investment, not its nominal performance that matters. After all, if the central bank sponsors sufficient money-supply growth (inflation) then the resultant fall in the relative value of money may very well lead to large gains in the nominal prices of most investments.

news.goldseek.com >> 22 May 2007

Why the US$ Will Rally
By: Steven Saville, Speculative Investor
This currency market view does not, however, automatically mean that we expect the US$ to move higher relative to gold. While a multi-month advance in the US$ relative to the euro would normally translate into a lower US$ gold price, we are anticipating an up-move in USD/EUR driven more by euro weakness rather than by genuine US$ strength. Such an outcome could coincide with gold rising in terms of all currencies, but rising less in US$ terms than in euro terms.

news.goldseek.com >> 15 May 2007

The Yen Carry Trade
By: Steven Saville, Speculative Investor
In recent commentaries we've devoted a much larger-than-usual amount of space to the Yen. The reason is that the performance of the Yen and the related Yen carry trade are such important pieces of the current market puzzle.

news.goldseek.com >> 8 May 2007

Currencies and Equities
By: Steven Saville, Speculative Investor
US corporate earnings for the first quarter of the year were generally above analysts' expectations and this has been trumpeted as an important driver of the stock market's recent advance. As usual, though, there's a lot more to the story than meets the eye.

news.goldseek.com >> 1 May 2007

Gold Stocks’ Leverage (or lack thereof)
By: Steven Saville, Speculative Investor
Most people involved in the gold sector would realise that over the past few years gold stocks, as a group, have failed to live-up to their reputation as leveraged plays on the gold price. They provided substantial leverage to gains in the gold price during 2001-2003, but during the most recent 3.5 years of the gold bull market an investment in gold bullion has out-performed an investment in the AMEX Gold BUGS Index (HUI). Given that gold stocks are much riskier than gold bullion, this begs the question: why invest in gold stocks?

news.goldseek.com >> 24 April 2007

The Bond Bear
By: Steven Saville, Speculative Investor
We've been long-term bearish on bonds since their June-2003 peak. Actually, we turned long-term bearish well before June of 2003 and have always considered the final run-up to the 2003 peak to be an irrational response to the threat of deflation. We say "irrational" because such a threat never existed.

news.goldseek.com >> 17 April 2007

Focus on the Disease, Not the Symptom
By: Steven Saville, Speculative Investor
A writer desiring to paint a bearish picture of US economic prospects and the US$ could choose to highlight the huge US current account deficit, because the word "deficit" has negative connotations. However, the huge current account deficit necessarily goes hand-in-hand with a capital account surplus of equal size; and "surplus" is a word with positive connotations. A writer desiring to paint a rosier picture could therefore choose to highlight the huge US capital account surplus.

news.goldseek.com >> 10 April 2007

Is the Fed Privately Owned? Does it Matter?
By: Steven Saville, Speculative Investor
In our research we occasionally come across articles in which the writer rails against the 'fact' that the Fed is privately owned, the implication -- whether intentional or not -- being that everything would be fine if the Fed were a government agency. That is, the implication of such complaints is that private corporations can't be trusted to do the right thing when it comes to management of the monetary system whereas the government can. This, however, is a case where two wrongs -- the belief that the Fed is privately owned and the belief that government ownership would represent a significant improvement -- definitely don't make a right.

news.goldseek.com >> 2 April 2007

Analysing the Gold Sector’s Performance
By: Steven Saville, Speculative Investor
The long-term trend for the gold sector is always the opposite of the long-term trend for the broad US stock market. For example, the gold sector was in 'bull mode' during the 1960s and 1970s while the S&P500 was in 'bear mode'. The long-term trends then reversed, with the S&P500 embarking on a bull market that extended through the 1980s and 1990s while the gold sector suffered a 20-year bear market. And then, in 2000, the long-term trends reversed direction again.

news.goldseek.com >> 27 March 2007

A Sustained or a Momentary Liquidity Contraction?
By: Steven Saville, Speculative Investor
The way we define the terms, there's a big difference between liquidity and money. This difference revolves around the fact that once money is borrowed into existence it remains in existence until/unless the debt is repaid*, whereas liquidity can disappear in an instant with no change in money supply.

news.goldseek.com >> 20 March 2007

Stocks, Commodities and Inflation
By: Steven Saville, Speculative Investor
In summary, the relationship between stocks and commodities has been different during the first seven years of the current cycle in that these two asset classes went from being inversely correlated or uncorrelated to being positively correlated. However, the stage has potentially been set for things to go back to the way they were.

news.goldseek.com >> 13 March 2007

Silver versus Gold
By: Steven Saville, Speculative Investor
With the stock market having most likely commenced an intermediate-term correction it's a good time for us to go over some old ground; specifically, we are going to re-visit the relationship between the silver/gold ratio and the broad stock market that we've discussed a number of times over the past several years.

news.goldseek.com >> 2 March 2007

Sometimes It Actually Is Different
By: Steven Saville, Speculative Investor
The "it's different this time" argument will routinely be dragged out in the latter stages of a long-term bull market to justify valuations that simply can't be justified by traditional methods. In the end, however, valuations always revert to their long-term average. In fact, once valuations reach a major peak and reverse course they invariably keep shrinking until they have moved well below their long-term average, at which point a new version of the "it's different this time" argument will typically surface to explain why valuations are doomed to remain low. As a result, investors who buy into the idea that "this time it's different" tend to end up in the poor house.

news.goldseek.com >> 20 February 2007

Inflation's Non-Uniform Modus Operandi
By: Steven Saville, Speculative Investor
Which brings us to our final point: inflation sets in motion a positive feedback loop in that it causes problems and these problems are used to justify more inflation, which leads to bigger problems, and so on. But this loop could not exist if the link between inflation and the pernicious effects of inflation were readily apparent to most people. That the link is not readily apparent is, in turn, a consequence of the non-uniform way in which inflationary effects ripple through the economy.

news.goldseek.com >> 13 February 2007

The Dollar-Gold Relationship
By: Steven Saville, Speculative Investor
Anyone who follows the gold and currency markets closely will realize that the US$ gold price and the Dollar Index generally trend in opposite directions; or, to put it another way, that the US$ gold price and the Swiss Franc generally trend in the same direction. This reciprocal relationship between gold and the dollar is often not evident on a daily or weekly basis, but is almost always evident during periods of 12 months or longer.

news.goldseek.com >> 6 February 2007

2007 Stock Market Outlook
By: Steven Saville, Speculative Investor
As far as the US stock market and most other stock markets are concerned, the current monetary situation is probably close to being as good as it gets. To be specific: credit spreads are near all-time lows, indicating that even poor-quality borrowers can obtain credit at low rates of interest; yield curves are flat or inverted, which is indicative of a strong desire to borrow short-term in order to speculate in longer-term assets/debt; the global supply of currency is expanding at a rapid rate; and bond yields remain near 20-year lows despite the obvious evidence of inflation. It's impossible to predict exactly when this utopian situation will end, but in our opinion there's little chance of it persisting throughout 2007.

news.goldseek.com >> 30 January 2007

The Current Account Diversion
By: Steven Saville, Speculative Investor
We thought we'd weigh-in on a debate between Peter Schiff and Robert Murphy regarding the implications of the US's large and seemingly ever-expanding current account deficit (and corresponding capital account surplus since a deficit on the current account must be offset by an equivalent surplus on the capital account). Mr Schiff argues that the current account deficit is a major problem that virtually guarantees a much lower US$, whereas Mr Murphy argues that today's balance of payments situation is not necessarily a bad thing and does not point towards a weaker US$.

news.goldseek.com >> 23 January 2007

Short-term Interest Rates and the US Stock Market
By: Steven Saville, Speculative Investor
Earlier in today's report we speculated that the Fed Funds Rate would be unchanged during the first half of this year and then fall by more than the market is presently expecting during the second half. The question we now want to address is: if things pan out in this way on the interest rate front, will the stock market be a beneficiary?

news.goldseek.com >> 16 January 2007

Confusing the Effects of Inflation with Real Improvement
By: Steven Saville, Speculative Investor
The bottom line is that when we take a long-term view of relative price performance we can see the footprints of an inflation problem exactly where we should be seeing them. The rules of the game haven't changed; all that's changed is the money in which prices are denominated. Specifically, money has been losing value at an accelerated pace and it's been doing so in a deceptive way.

news.goldseek.com >> 9 January 2007

How fast will S&P500 earnings grow?
By: Steven Saville, Speculative Investor
What it does mean is that over the coming 5-10 years the S&P500 Index is very likely to maintain its downward trend relative to gold and stock market valuations (P/E ratios, etc.) are very likely to contract. It also means that the risk of a large decline in nominal dollar terms occurring at some point over the coming 12 months is much higher than it would normally be due to the potential for the optimistic earnings-growth expectations currently factored into stock prices to come face-to-face with reality.