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| correlations [«] [ Gold ] [ $ / € ] [ Oil / $ ] [ Yields ] [»] correlations | ||
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| 2. Jan 2000 . . . . . . . . . . . . . . . . . . . . . . . . . [ scroll down ] . [ end ]
When president Nixon ended the system of fixed commodity prices, the result was not an unregularly floating of commodity and currency prices but a system of fixed correlations of commodity prices instead, two of which are discussed here. We think that there are more such unknown ,hidden' correlations which altogether comple- |
tely determine the price fluctuations of commodities, currencies, interest rates and - even stock prices. The two correlations we know are the well-known relationship of the gold price to the Dollar/DM cross currency rate and the ,Saudi connection', which relates oil, priced in gold as currency, to Dollar/DM (now Euro). At the moment three variables, gold, dollar, euro determine the fourth one - oil. It is too expensive. This is good for the oil-producing countries but bad for the economies of the ,no haves' in Europe and East Asia. | |
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| 2. Jan 2000 . . . [ scroll up ] . [ start ]
We are looking for more correlations, hopefully including the main interest rates. Note that we are not looking for trivial correlations, which everybody knows. For instance that between the earnings of |
companies to their stock prices, or that between inflation to interest rates. The correlations we are looking for must be independent, a concept which resembles that of ,linear independence' in mathematics. They are typically unexplainable as the two ones above, except there is a complete mathematical theory of the capital markets. Then they play the role of empirical laws in physics, which later may be explained by a full theory. | |
| correlations [«] [ start ] [ Gold ] [ $ / € ] [ Oil / $ ] [ Yields ] [»] correlations | ||