Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: LLCF who wrote (4411)	6/7/2001 12:47:47 AM
From: Maurice Winn	Read Replies (2) of 74559

<...when the government prints more dollars current dollar holders lose value by that amount, > That is the crux! The sneaky part is that dollar holders don't notice that they are being diluted because The New Paradigm is so rapidly increasing productivity that there is no inflation despite oil price hikes and lots of new dollars. So dollar holders are happy with their interest rates, especially now that stockmarkets seem to be in the gutter. So Alan Green$pan gets to print billions for the government, without frightening the horses and causing a stampede out of the dollar into anything else. He can only do that because of The New Paradigm of technological revolution and globalisation. But I'm onto him, so I've already borrowed heaps of the money, which he is diluting flat out, so I'll have to pay back much less than I've borrowed. I'll repay my creditors when the stockmarket zooms up or the money-game changes [if creditors get wind of the rort and refuse to lend money at derisory interest rates]. What is happening is that share markets are replacing money [and gold and platinum] as stores of value. Shares are becoming money. I hold stocks in a financial institution which gives me a credit card and cheque book. $$ are just a means of exchange for me. One day, I might transfer shares [in cyberspace with my cellphone] instead of $$ to pay somebody. Then Alan Green$pan will be in trouble as he'll have to compete with shares as a store of value and means of payment. Interest rates will then zoom up to match the returns available from shares. But meanwhile, share P:E ratios are increasing to give returns similar to holding cash deposits, which are low. Holding a broad portfolio of shares is as secure as anything on earth, including the US$$. I don't know where the balance will be. My guess is around 5% return on shares and return on money [after money-printing dilution is accounted for]. People say that P:Es are absurdly high. But that's looking in a rear view mirror. Shares are the new currency. Returns on currency are traditionally only 3% or so. Given the growth rates possible from The New Paradigm and the unlimited possibilities with 6 billion people who want a lot of stuff, shares are the best bet. People holding cash are suckers!! Bring on the barbecue. Mqurice

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