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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 71.75

-0.5%

3:59 PM EST

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To: bambs who wrote (59651)	6/4/2002 9:20:25 AM
From: RetiredNow	Read Replies (2) of 77397

Hey Bambs, a couple problems I see with your theories. I'm not disputing that the dollar may lose value against other currencies in the short term. But there is also a supply and demand factor here. Where will all that money go? You are saying gold, but people the world round park their money in US currency because they believe that the US is the safest place to invest their dollars. There simply is no safer place. All the other major governments in the world are off the gold standard too, so there won't be any safehavens except for gold in the short term. But in the long term, money gravitates to the safest government currency: the U.S. currency. The other problem I see with your theories is that there is no worry of inflation right now. In fact, inflation has been fairly tame for a decade. Rising productivity has done wonders to stifle inflation. Not only that but I believe in macroeconomics as the main underlying current that drives the economy. The main driving current here is population booms and busts. Right now, we have the Baby Boomers which just went through an excruciating market downturn. Those boomers are scheduled to retire in mass around 2008-9. Problem is that alot of their wealth evaporated in the last 2 years. So they will have to put that money to work over the next 6-7 years to try to recupe enough to retire as scheduled. I seriously doubt that money will go into gold. Despite gold's recent heights it is still a highly speculative investment, even more so considering that you have the world's financial powers (central banks and governments) fighting to keep gold prices low and stable. Baby boomers won't fight the fed or the government. They are looking for some good returns in a short period of time and that means equities. 2003-2004 will be the resumption of the bull and it will last at least 4-5 years. That means you have the rest of this year to take your gold profits and run with them to the bank. Once the new bull gets started running, your gold gains of the last few years will evaporate in very short order. Then after the bull, sometime in 2008-9, the place to be will be a heavy allocation in bonds for a decade or so as the boomers move their money to fixed income securities. Anyway, I'm prepared for the next bull and continue to invest during this downturn. I'm sure I'll see the rewards from this planning within 3-4 years.

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