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To: Hawkmoon who wrote (38483)	8/6/1999 11:51:00 AM
From: Enigma	Read Replies (1) \| Respond to of 116764

a) I believe no such thing - it I was interested in gold simply because you're against it - it would assume I knew about you 26 years ago!! No, I was merely pointing out that some get their jollies by being against gold - if the thread didn't exist you wouldn't have a forum - it seems you need the thread, perhaps even more than most. And what's wrong with that? Free speech and all that. b) 'Dougie' - wrong guy. d

To: Hawkmoon who wrote (38483)	8/7/1999 10:46:00 AM
From: Rarebird	Respond to of 116764

The Currency Question: As we approach what may turn out to be the final stages of the long running world wide bullmarket for stocks, led of course by the ever impressive US market, it may be advantageous to take into account several issues that may effect an outcome in terms of where and how this could end. Most of us know that a stock induced Nirvanic state of financial euphoria has a habit of turning into something else, always at the wrong time and always without the permission of whomever thinks they are in charge of this wonderful self perpetuating wealth creation machine. The bears will have their day at some point, however the problem they will face may well not be what they are expecting. It is unlikely that the deflation of this balloon is going to be conducted in an orderly manner. The investment transition period from stocks and bonds to hard assets will not occur in an orderly manner either. Consequently the bursting of the paper asset bubble may have some serious fallout consequences and any strategy that involves accumulating hard assets needs to take this into account. The question is what will the effects of that fallout be ? To answer this we can look at the ingredients involved and ask what are the potential weak spots that may breakdown the most. After all, it may well be back to the basics but unfortunately most of us we have forgotten what the basics are. Way too much is taken for granted in this wonderful electronic age, while little is said about the “what ifs” , when any crucial system fails. Any failure of a financial market today will effect all the components of that market and there will be a deterioration of the condition of those components since they all rely on being used to generate income. Stop the income and you stop the service. Stop the service and electronic life as we know it comes to a halt. Hence back to the basics. Y2k is not the real issue here, reliance on income is. Take away the income and Y2k does not really matter, since the electronic age is once again dependent upon usage for income. There is no free lunch I'm afraid and that is what we are about to find out. This certainly applies to those that have been eating the free lunch. The bubble can burst in two different ways. One is a breakdown of the financial system itself which appears unlikely since regardless of how many get caught, we still need the ability to stay current, as in have a means to pay for goods and services. The currency will still exist, it's value may change, but we do need a method of payment. Gold and silver coins won't do it either, sorry guys. It could be stated that we are already past the point of no return here and the financial markets may simply implode, but so far this has not happened and near misses have remained near misses. The “near miss department” has gotten could at this exercise and we view an implosion occurring as a result of sheer weight of numbers as possible but the less likely of the two scenarios. More likely is the potential for an external event, one that is devastating and is outside of any control mechanism originating within the financial system. This could include a large scale event that does considerable damage to a highly populated area and starts to mess with the fragile infrastructure that currently exists. This would implode the bubble as well since the appearance of control would be severely dampened, perhaps seriously dented. No amount of internet chatter is going to help here either. The basics are shelter, food and fuel. Without these life becomes difficult and electronic commerce can't grow vegetables, put food on the table, deliver supplies or chop firewood. The skills learnt from a keyboard will be useless if the connection is not there to go with it. Electronic commerce is dependent upon usage for its on going survival and this is where it gets tricky, since any slow down reduces that usage and at a certain point the provider of that service shuts down. Only the strong survive, no better evidence of this perhaps is demonstrated in the US auto industry, which once the subject of a boom itself, is now dominated by three players, one of which is largely European owned. What happened ? The boom, created by an apparent never ending demand, ended and the weak, those that were too dependent upon demand that had not yet materialized to enough of a degree to make them strong, simply shut down. Too many offering too little, in a shrinking environment, with too little to back themselves up, i.e.: no cash reserves. Which is what will happen when this bubble bursts.. It is not enough to assume that the Fed will fix it, since that is a bit like expecting the burglar to fix the broken door. Shrinking demand will take the shine off a large number of businesses that are currently playing the ever diminishing cash flow game, turnover up, earnings down, losses increasing. Competition may be a wonderful thing but it can be devastating as well, especially when it involves a game that includes all the entire audience as well. Where do all these instant economists who now appear as “individual investors” come from anyway? What is happening here is far more significant than most commentators realize. We have entered a period that may see a transition from US $ to perhaps over time Euro domination in world affairs, as the struggle between the yen, the dollar and the Euro gets a head of steam. Weakening currencies could play havoc on bond markets and to a lesser degree stockmarkets. We tend to forget that we are all playing this game of holding assets denominated in US $'s, and it will be difficult to avoid any meltdown involving the US economy and the $ as a result. This should be clearly understood as it will be too late to wake up one morning and find out that the dollar has sunk to another knew low, stocks have fallen further and interest rates are at 14%. Most “individual investors”, the ones Mr. Greenspan believes can't be wrong are, not aware it seems that their money can simply lose its value because the currency weakens and consequently have not taken this into account. It may be a prudent time to check this out and start working on a fallback position. fiendbear.com