Bob Y, thanks for the kind words. I enjoy your posts as well.
As you know, deflation can lead to inflation or even hyper inflation as govts try in vain to create the illusion of wealth during a depression. So my post doesn't set out a definite view on which will prevail in the coming years.
To me, it really doesn't matter. Either way this is accumulation time for gold, which does well in any "flation" (i.e. any time people lose confidence in govts and corporations, which are the only things backing stocks, bonds and cash).
Right now, the world has confidence in the U.S. backed paper assets. The reason is that: (1) the U.S. ran the lowest deficit of the major industrialized countries in recent years; (2) has had the lowest inflation; and (3) has grown faster than most of the other industrial countries.
But the U.S. success is only relative. The rest of the world is already in deep trouble. When the U.S.'s credit worthyness is viewed with suspicion--and it soon will be--there will be no more safe havens Or no paper ones anyway.
I don't think the Russians alone could affect the commodities market in the way you suggest. Also, I have no reason to beleive the Russians aren't acting like any other rational market player in current market circumstances. Do you think their sales were politically motivated?
As for "world wide rebuilidng," I don't think that squares with the facts. World-wide, growth has been weak consistantly throughout the 1990's. Only financial assets have appreciated quickly (as a result of easy money, which is a response to the slow growth).
Good Investing
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