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Strategies & Market Trends : Natural Resource Stocks

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To: austrieconomist who wrote (75084)	1/12/2009 2:03:15 PM
From: isopatch	Read Replies (2) of 108558

Hi Bob. Excellent points. Couldn't agree more. All recessions have a deflationary bias. This one, more so, because it's larger in size that anything we've seen since WWII. An example of what makes history rhyme instead of repeat exactly; Our current Recession (Depression) occurs in a macro financial context 180 degrees from the 1930s. Then, we were the worlds leading creditor nation with a strong currency. That made massive deficit spending easy to support while keeping the dollar relatively strong throughout the process. Because that strong macro foundation had been replaced by a sea of quicksand, todays towering wave of debt creation will short curcuit the 30s deflationary trend into a new more powerful inflation. Skeptics can point to velocity as the spoiler to that thesis. However, velocity will turn up as large aggregations of capital correctly anticipate the debasement of the dollar inherent in the levels of deficit creating we're now witnessing without the requisite foundation to support it. JMHO, Iso

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