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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: alpine_climber who wrote (70789)1/5/2011 12:32:39 PM
From: koan  Read Replies (3) of 78428
 
I don't feel any of us can look forward very much, or very well. And the worlwide economic problems are not well understood even by the world's best economists.

The three macro trends for right now I see are these:

1) They have 5 to 7% inflation in Asia, but they are reticent to raise interest rates, so they can keep their currencies low for export reasons.

2) Europe is in monster trouble and must take care of debt problems even as inflation is creeping in there. They cannot tighten or raise interest rates at their peril. Export problems again.

3) The US did not engage in enough stimulus to begin with as Krugman, Stiglitz, Roemer and Volker said, and not the right kind (e,g, tax cuts are the worst kind of stimulus), the government needed about 3 times more stimulus and needed direct stimulus.

And now the new congress will start cutting spending left and right and could send us into a deflationary depression. And as the congress will do exactly the wrong thing that will continue to leave the fed, the only ones who can do any stimulus and they are pretty much confined to QE.

Asia, Europe and the US all have to play chicken with inflation. They have no choice. So will continue to print money.
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