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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Oblomov who wrote (19370)9/18/2000 10:34:32 PM
From: Archie Meeties  Read Replies (3) of 436258
 
It has to be inflation. There's no other way to deal with the staggering corporate and public debt except to hyperinflate our way out of it. In other words, borrow money to buy cheap physical gold. -g-

I'm sure you've noticed that the new mantra of the fed (and the prez, our trusty economic sage) is that this economy can withstand more inflation than ever before. This is preparation for the next rate cut and the subsequent inflationary push from the subsequent dollar devaluation (which would normally be a transient adjustment).

The message broadcast around the globe will soon be that the water is fine - the economy can withstand inflationary pressures heretofore unhearof, including oil. The purpose of course is to preserve the dollar and prevent hyperinflation, Brazil style - which would appear if faith in US equities began to wane and dollar exodus began.

Will it work? If oil returns to $20 it has a chance, but as things are, fiat is weakening against one of two real measures of wealth, and I think that another attempt at pushing the nasdung to new highs will be seen for what it is -a false creation of wealth. I used to think the deflationary path would be walked, but I now think the asset inflationary path will be tried *again*.

In fact, I think inflation is at a critical point right now - one push higher and it will exceed real growth. That push comes from gasoline, diesel, and nat gas. This months NAPM will be a sight to behold.
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