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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: patron_anejo_por_favor who wrote (77602)10/31/2000 11:16:47 AM
From: BigBull  Read Replies (2) of 95453
 
OT Patron, that was a most fascinating article, chock-a-block full of great data. Those money supply numbers really caught my eye. Wow! Do you have any comparable numbers for the Euro zone? Might make an interesting comparison study.

The unwinding of all this crazy lending typically occurs in two ways:

1. Credit crunch/drying up of liquidity - recession.
2. Desperate money pump which only delays the inevitable and makes it worse by adding rampant inflation to the mix - bad recession.

I haven't decided which way this is all going to fall out, which is why I'm on the sidelines watching. Those recent money supply numbers make number 2 a distinct possibility and would favor hard assets tremendously, as the inflationary part of the cycle gets drawn out in time. At any rate, it would seem that we'll know in a matter of months as the data will become clearer and we get a better idea of which way this credit cycle breaks. Lots and lots of cross-currents right now. It might pay investors to have Plan A, B, and C. <g> Things were a lot simpler in '97 - '98, a blind man could see a boom coming.

It will be interesting to see if we begin to see inflation psychology take off and people begin to shift money into hard assets. Todays existing home resale numbers are remarkably strong. Are we beginning to witness a major shift in asset classes by investors? Where will all that cash go? Don't know, let's wait and see.
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