Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Sid Turtlman who wrote (69075)	10/13/1999 8:25:00 PM
From: valueminded	Read Replies (1) \| Respond to of 132070

Sid/All You and I are in agreement for the most part. This is why I am out of bonds until the stock market starts to respond to the resurgence in interest yields. That being said, the scenario can go one of two ways: I see deflation as only a possiblity if the initial plunge in stock/asset prices is rapid enought to ensure the destruction of massive amounts of paper wealth. A bear market (such as the 1970's) wouldnt do it in my opinion as their is enough of a cushion to ensure that demand does not fall off the cliff. (ie some people get their money out over a longer time period ensuring some demand and preventing a deflationary crash) A crash(such as the 1929) on the other hand destroys paper asset wealth so rapidly that the remaining debt overwhelms the remaining money supply leading to a deflationary crisis. So it seems apparent that stage 1 = inflation/higher bond yields. Stage 2 = inflation/deflation depending on how the stock market responds. imo