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Politics : High Tolerance Plasticity

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To: Second_Titan who wrote (2758)	4/3/2001 2:58:09 PM
From: Tommaso	Read Replies (2) of 23153

Look at the growth in what is now considered the most basic measure of the money supply, called MZM. Check the table at the bottom: acceleration to more than 27% per annum growth. I wonder if even in the midst of the Civil War greenbacks were created at this rate. stls.frb.org It's hard to see commodity prices collapsing with fiat money being created like this. Anything can happen in economics, though. If Milton Friedman were correct, and if this keeps up, we would see an annual inflation rate of up to 20% within two years. At the very least, it should be very easy for anyone with a home equity line of credit to pay heating bills. Energy stock prices may get dragged down in a general market collapse, but they seem to represent more value than anything else I can think of. Lower prices should attract takeovers and buybacks. I am hedged against a general market decline with puts on the Dow and Prudent Bear Fund, planning to plow some of these funds into more energy stocks if they come down 30-50% from where they are. Meantime, I agree with the Raymond James analysis that we may see short term weakness in these stocks, but that selling out to try to catch these ups and downs is even more risky.

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