Liquid Gold

Dear Fed, Please bring me a rate cut for Christmas

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Dear Fed Governors,

The financial markets are in bad shape. The dollar is dropping. The economy is growing very slowly and may avoid a recession if you act quickly.

On a personal note, I'd like to improve my ranking in this contest. If you drop rates, gold will climb and all my gold mining stocks will outperform. Stocks like Yamana Gold (AUY), Kinross Gold(KGC) and Goldcorp(GG) are already up considerably but my underperformers need some help. The CEO of U.S. Gold (UXG) just upped his stake in the company to 21% so he must be a believer in the upward trend of gold. The stock is down for the year but it has moved up over ten percent since he took the larger stake.

And then there's tiny Northgate Minerals (NXG) a Canadian producer. It's production is rapidly increasing and the company has so much potential. Because it is so inexpensive, a fat rate cut could give it a huge percentage pop upward.

Oh, fellas, I forgot to mention oil. That, unfortunately, could rise as rates get cut, but it is not a given. Most of my oil stocks are doing just fine, thank you, but Haliburton (HAL) could use some improvement. Fortunately because HAL has moved its headquarters to the heart of the oil fields in the Middle East, I'm sure it is only a matter of time before I see some significant improvement in its price.

I've been playing defense during the past four months because of the economic climate. In my real life portfolio I've taken even higher stakes in the metals and mining stocks. You could really improve my holidays and my year end performance with a 50bp rate cut.

Your friend,
Liquid Gold