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              | 3 Ratio
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        Yield Curve Gold
        Eagle yield curve calculation "The calculation that I use is
        the yield on the 30 year Treasury bond (or 10 yr) divided by the yield
        on the short term 3 month Treasury bill  and Financial
        Sense  and Wikipedia 
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        Consumer Credit, Factors
              Affecting Reserve Balances, Industrial Production, Capacity
              Utilization, Money Stock Measures, Commercial Paper, Country
              Exposure Lending Survey, Foreign Exchange Rates, Flow of Funds,
              Home Mortgage Disclosure Act Data,  Household Debt ratios,
              Survey of Consumer Finances,   
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        more on bonds and inflation
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          - Bonds, Overview, can be thought of as a loan,
            citizens are the lenders, the borrowers are usually a government,
            local municipality or big company.  They use the money for
            roads, finance factories, fund the federal deficit...etc.  You
            purchase a bond at 'face value', the pay back date is the 'maturity
            date' at a predetermined interest rate or 'coupon'.  They're
            known as 'fixed income' investments, they assure a steady income ...
            less volatile than stocks.  Often it is said: When yield goes
            up, price goes down ... bonds can be held to maturity or bought and
            sold on the open market.  The price fluctuates but you will get
            the same payout (coupon).  Yield:
            a figure that captures the the change in price (value) of the
            bond.  Its the percentage return of the bond at any given
            price.  Formula: Yield = Coupon / Price ... the yield is simply
            the coupon (% rate) ... when the price of the bond fluctuates, the
            yield grows or shrinks to compensate in either direction. 
            ex:  $1000 bond with $60 coupon, yield =6% ... but current
            yield = $60 / $800 = 7.5% if price drops ... All this is complicated
            by how coupons are reinvested and the compounding
            effects.  
 
         
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              | 7 13
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          - Bond trading
            ... If you're a bond buyer, you want high yields and then higher
            prices once you own it.   You would like to pay $800 for a
            $1000 bond and price rises are a good thing.  For individuals,
            short term bonds are the 'safest' and not 'callable' or paid back
            early.  Rising Inflation
            is the biggest threat to buy-and-hold bond
            investors.   Inflation usually accompanies strong economic
            growth and is a bad sign for bonds.  Rising prices make today's
            dollars worth less in the future and are particularly corrosive to a
            30 year bond.  The threat of inflation raises bond prices and
            yields fall.  Inflation erodes the value of bonds.  Lower
            growth, which normally eases inflationary pressure, is often seen as
            positive for bond prices, pressuring yields lower.   See above July, Aug, Sept 2007
 
         
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            | 12 Home
              Finance Index,
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            | Fannie 
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            | Components: RSO,CFC, IMB TMA, 
                 DHI, CTX will be added soon.  | 
           
          
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               estimated data before Sept 20, 2007 
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            | 12a Transportation
              Index,
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               Major markets don't experience significant rally
              unless the Transportation Index is also rising. 
                
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