Date: Tue Feb 10 2004 14:41
trotsky (Wolfgang@PIMCO) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
Puplava neglects to mention ( because it doesn't fit his inflation preconceptions ) that Gross uses the last paragraph in the referenced article to muse about a possible deflationary debt contraction, which would of course result in sharply lower interest rates.
note also, if holders of emerging market or junk bonds were to panic out of their holdings, rates on those instruments would rise, but rates on treasury debt would most definitely decline concurrently.
lastly, since the true nature of inflation is fost and foremost monetary inflation ( price rises are merely a symptom of inflation ) , i.e. increases in the money supply, one must take note of the fact that the broad US money supply has just recently suffered its biggest percentage contraction in several decades.
otoh, China's money supply has been expanding at a brisk 20% annualized rate - and this is the major source of the commodity price boom.
interestingly, when comparing US and Chinese money supply growth rates of late, one wonders if it is really true that the Yuan would rise if it were made convertible. maybe it would rather fall instead?
Date: Tue Feb 10 2004 14:26
trotsky (mozel) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
note btw. that i'm not in favor of restricting oil use via government intervention ( which is the preferred 'solution' of the peak oil doom prophets ) . i believe it's better to use resources than leaving them in the ground - and if a solution to peak oil is possible, the market will find it.
debate of peak oil mostly serves to raise awareness of what MIGHT happen - it's not set in stone that such and such will definitely happen once the production decline begins ( although i would bet that the disruptions will be severe ) .
i share your disdain for what you call 'gangster government', and i also have some faith in human ingenuity. note however that the possibility that the industrial age is merely a historic accident can't be ruled out entirely. Greenspan once said that 'information and knowledge , once gained, is rarely lost again...'. that however is bunkum, even by the standards of relatively recent human history. after the demise of the Roman Empire, several hundred years of 'dark ages' followed, in which almost ALL the knowledge previously gained was lost, and had to be reacquired from scratch.
whether it's likely or not to happen again is one thing - but it is certainly POSSIBLE, and the end of the oil age would be a good opportunity. |
