Hi carranza2, If we are in a situation that tends towards global deflation, and I believe we are, on the manufacturing side, then the authorities around the globe, each individually, for their respective interests and to cover respective mistakes, will print, and print some more, from the US to China, Japan to Argentina, Russia to Turkey, (I do not know about Euro zone and AustraAsia) and then print still more. Even as they act individually, the effect will be the same as if they acted in concert, and thus ‘get away with it’.
Ultimately inflation will win, at least on the services side, and maybe on the real estate side, probably on certain commodities, and possibly on gold, if it is not already, depending on definition used, I believe, because the levitating power of printed money is like gravity, inexorable.
Between manufacturing deflation, service inflation, relocation of factories, spreading of income generation, overall increase in demands for commodities, wealth (what is left of it) will be redistributed, from developed countries to China/India/Russia, from creditors to debtors, from Japan to the US/Europe/China, from the world to Argentina (in a manner of speaking, on what is left of it).
The abracadabra realization has not happened as yet: that as wealth and wealth generation is spread around, growth of wealth per person will be possibly less.
I do not know what happens when folks, companies and media reach this conclusion. They may just spin it as, ‘everyone will be richer, and the multiplier effect will make growth happen even faster, at a higher rate, for more prolonged period.
I just do not know. In any case, we got a while to go yet. Today (my last night) I sold some NEM June Covered Call, strike price 20. Expecting NEM to meander at 20 between now and then, or to drop due to merger dilution.
I am doing currency moves, and selling covered calls, all before January is done with!? 2002 will be a busy year:0)
Chugs, Jay |
