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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Jim Willie CB who wrote (979)9/23/2003 7:57:22 PM
From: glenn_a  Read Replies (2) of 110194
 
Hi Jim.

In reply:

((global demand has already slowed significantly, sorry
CRB, gold, silver, they are all reversing longterm downtrends))

... umm, no need to apologize. :) Actually, my comment was "the signs (of widespread deflation) ... would not yet by visible in the CRB and many other markets, for the simple reason that this aggregated demand shock has not yet occurred". A depression-engendering global demand shock would be qualitatively different from what we've seen so far in terms of "slowing global demand". Your comments on the CRB, gold, and silver having reversed long-term downtrends is well-taken. However, it is not clear to me that this would be sustained in the event of a global agg demand shock.

((mines all across the world have been closed over the last 10-15 years ... they are not subject to price declines ... you are overlooking the trend of closed mines))

Any and all assets are subject to market pricing mechanisms ... and no, I'm not overlooking the trend of closed mines. :)

((a simple series of questions .. why is the price of silver ... gold ... home heating ... up))

Umm, because of (i) excessive money supply growth (i.e. credit inflation) and (ii) a secular turn in the pricing of commodities (over the long-term). However, we have not yet experienced the pricing of these commodities in a debt implosion.

I understand your perspective and rationale Jim. But I leave my mind open to a debt-induced deflation that is very harsh on commodity pricing as well. Doesn't sound like this is a possibility in your view.

Thanks for the reply.

Best wishes,
Glenn
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