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Politics : Ask Michael Burke
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To: Knighty Tin who wrote (60411)5/23/1999 3:47:00 PM
From: Mark Adams  Read Replies (2) of 132070
 
I love that 'finding people willing to borrow' point you made with respect to reinflating. Adding capacity in a time of excess capacity, right- that truly is pushing on a string. But this point didn't quite fit my mental model:

"Commodities. There may be some hoarding of precious metals as paper assets decline."

My memories are 'Brother, can you spare a dime?'. Note that I was born a mere 35 years ago, so I can't claim to have personally experienced this. In a deflationary cycle, cash is king and debt a burden.

I guess precious metals could make a proxy for cash. And if the trade deficit got bad enough, we might have to <gulp> devalue. That would give those platinum holders something to smile about.

You go on to say

But other commodities will fall in price. Some with less elasticity, such as oil, may not do as badly as lumber.

Lumber was something I seriously considered. Thanks for pointing out the demand side potential. People who own land free and clear, and plant trees may have a saleable resource once things bottom out.

My, this truly is a gloomy outlook. There is an out. We need people with imagination to redirect our efforts from production of more/faster/improved beany babbies to something a bit more challenging.

Something with potential to provide long term gains for society. I'd suggest space mining/exploration. With changing demographics and excess affluence, we might be able to market vacation retreats to new frontiers...

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