To: Terry Whitman who wrote (5355 ) 8/28/2001 1:59:40 PM From: craig crawford Read Replies (1) | Respond to of 52237 >> but it is my understanding that the value of gold tends to stay fairly stable in deflations << i dispute claims that gold does well during deflations. >> There are some good articles at (www.gold-eagle.com). Keep in mind that they are in the bizness of selling gold, so the articles tend to have a pro-gold bias. Here's a couple that may be applicable to gold and deflation - << yes, you can't believe everything those jokers have to say. for example, from the first article you listed. "From early 1930 to 1932 Homestake Mining appreciated approximately 500%"gold-eagle.com this is an outright falsehood. homestake didn't appreciate anywhere near 500% during the timeframe he spoke of. >> Gold rose in value – by market demand, confirmed by government edict - by 69% between Roosevelt's inauguration in March '33 and January '34. In terms of purchasing power...gold had risen almost 100% during the biggest deflation in America's history. <<gold-eagle.com more garbage. contrary to what this simpleton who wrote the article would have you believe, 1933 was highly inflationary, not deflationary. the bulk of deflation ended in 1932. in 1933-1934 the money supply was exploding, the government was running absurd budget deficits (inflationary), fdr devalued the dollar, shut down the gold markets, the banks, and the foreign exchange markets. the stock market had it's best performance of the 20th century in 1933. some deflation! in truth, back then investors (who didn't flock to gold), chose stocks as a safe haven from inflation, not hard assets like in the 1970's. i guess the logic was, bonds would do poorly in the inflationary environment, so investors exited that safe haven in favor of stocks, which were paying higher yields. of course fdr's dictatorial seizure of the u.s. economy plus the obvious inflationary stimulus led investors to believe that a recovery would be sufficient enough that dividend payouts would not be cut. interestingly enough, the two greatest upturns in the market in 1933 came on the heels of the two largest drops in the dollar. people sought the safe haven of stocks in the face of a weakening dollar.