Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (964)	11/26/2000 11:02:40 AM
From: Box-By-The-Riviera™	Read Replies (1) of 74559

follow up.... on gold....so deflation is detrimental to gold? first from this article: suntimes.com The growing consensus is that the economy cries out for new capital formation, and that requires help on both monetary and fiscal fronts. In monetary policy, an interest rate cut is needed from the Fed. In fiscal policy, the relatively small tax cut package containing important pension reforms is needed from Congress beginning Dec. 5 rather than waiting for the uncertainty of the 2001 session. Few dare utter the word, but the economy's worsening problem is deflation. In late 1996, supply-side advocate Jude Wanniski wrote his then friend Greenspan to congratulate him on his marriage and to wryly express the hope that the falling price of gold signaling a coming deflation would not spoil his honeymoon. The current deflationary gold price is $265 an ounce, representing a $35 drop since Jan. 1, 2000. That promises to be more dangerous for the country than threats by future Fed governors to the chairman's domination or a phantom oil inflation.

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