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To: flyboy who wrote (54050)	1/4/2001 12:11:08 PM
From: LLCF	Read Replies (1) \| Respond to of 436258

<Gold is not the commodity it once was because its intrinsic value is diminished…> Oh, really? kitco.com DAK

To: flyboy who wrote (54050)	1/4/2001 12:51:35 PM
From: pater tenebrarum	Respond to of 436258

<<Gold is not the commodity it once was because its intrinsic value is diminished…>> what is that supposed to mean? can't you just say it's in a bear market... true, GS has now retraced quite a bit...note however, that it's all about perceptions. if the market keeps rallying and the IPO window re-opens, perceptions alone could drive it still higher. i usually play MER, MWD and LEH in the sector though...simply a matter of being more familiar with those. they all seem to be in a corrective rally, building a right shoulder as it were. definitely worth keeping an eye on. re. productivity, we have had extensive debates on this, here and on other threads. there can be no doubt that productivity increases have occurred. in fact, it is typical for disinflationary bubbles to be accompanied by surging productivity. the 1920's boom is a prime example. it is precisely this increase in productivity the seduces the central bank to keep its rates too low for too long a time, allowing credit and asset bubbles to form. this is because of the erroneous targeting of CPI changes, the desire to keep goods and services prices 'stable' as the primary policy concern, without taking into account that monetary inflation simply is being funneled into financial assets during disinflationary booms. the mistake is regularly repeated, with always the same end result. we also have major disagreements with the purported size of productivity increases...government's use of hedonic adjustments has distorted the data to such an extent, that a compounding error has been created in the measurement of productivity, GDP and inflation. the former two are vastly overstated, while the latter is similarly understated. a single, extremely small slice of the economy, namely computer manufacturing, accounts for virtually the entire data distortion. outside of this particular sector, productivity increases have been lame at best. i refer you to the study of Dr. Robert Gordon for details on this...remind me later and i'll post the link.

To: flyboy who wrote (54050)	1/4/2001 5:16:39 PM
From: Mike M2	Read Replies (2) \| Respond to of 436258

Flyboy, mwhodges.home.att.net a summary of the hedonic hoax. The hedonic deflator used in computing chain weigthed GDP was implemented in 1996 in an attempt to measure the increased computing power at reduced prices. Historicly, GDP attempted to measure the revenue and income flows in the economy in nominal dollars or real if you want to back out the effects in inflation. The trouble with using the hedonic deflator is that it creates a measure of growth that results in NO REVENUE NOR INCOME for ANYONE . It is economic nonsense used to justify the biggest credit bubble in history. Let me emphasize that MSFT, DELL CSCO et. al report their numbers in nominal dollars not chain-weighted dollars. Look at the table in the link provided to see how big the impact is. Since GDP is overstated - productivity is overstated as well. Mike