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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Crimson Ghost who wrote (98812)6/23/2009 5:04:20 PM
From: Hawkmoon  Read Replies (2) of 116555
 
I think Mish and Martin Weiss make a pretty damn good case for their deflationary scenarios:

globaleconomicanalysis.blogspot.com

When private credit issuance collapses, something has to make up the difference. That's where government borrowing takes up the slack in the private borrowing markets.

That's why it's KEY in any deflationary scenario that unemployment be contained as much as possible in order to preserve the consumer's ability to take on REASONABLE credit debt and pay it off. It's also a good opportunity to engage in productivity enhancing R&D and Infrastructure projects.

Of course, I disagree with Mish about the merits of considering Gold to be anything more than a commodity. Gold bugs are funny in that they assert Gold is valuable due to inflationary risks. Then when we have deflation there are people like Mish saying that Gold is valuable.

The reality is that Gold is a manipulated market. The majority of it is controlled by Governments, thereby it's easy for the remaining public supply to be manipulated by inflationist/deflationists.

But in the end, it still remains a shiny, yellow metal that has no bearing on the economic and/or productive capacity of the human being. THAT is what the value of money should be based upon.

Hawk
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