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Gold/Mining/Energy : Gold Price Monitor

GDXJ 94.04

+0.6%

Nov 21 4:00 PM EST

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To: Alex who wrote (53355)	5/28/2000 11:37:00 PM
From: d:oug	Read Replies (1) of 116764

Alex, it is a very long article and extremely well written, and while there is very little fluff it is easy to read and see the logic of the process to arrive at a simple conclusion. No gold issue, just a simple paper money supply and paper money creation along with the same supply/creation of credit with a focus of where it goes and what happens when there is a change in "direction" and "location." Ponzi Finance............ prudentbear.com The Credit Bubble Bulletin - by Doug Noland Ponzi Finance May 26, 2000 ... Dr. Minsky placed great importance on debt structures..... Minsky's model has three categories of debt structures: (1) Sound hedge finance ... cash flows are expected to exceed the cash flow commitments on liabilities... (2) Less sound speculative finance ... cash flows, although inadequate to fully service debt in the short-run, are generally sufficient over the longer-term. (3) Unsound Ponzi finance ... cash flows from assets in the near-term fall short of cash payment commitments and only with some future bonanza will cash flows ever be sufficient to service debts and provide any realistic hope of generating profits. Importantly, a 'Ponzi' finance unit must increase its outstanding debt in order to meet its financial obligations..... New money and credit are a necessity for perpetuating the game..... Ponzi financed assets, in particular, are highly sensitive to both changing perceptions and higher interest rates..... If our invoking Minsky Ponzi finance analysis is indeed the correct analysis for the U.S. bubble, the prognosis is increasingly perilous.

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