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To: schrodingers_cat who wrote (128625)	7/19/2001 6:07:49 PM
From: craig crawford	Read Replies (3) \| Respond to of 164684

>> Plenty of ways to play that in the US eg real estate,<< yes but you have to be choosy. a lot of real estate is too high and set to come down. why not buy some land in china? >> oil and gas companies, miners, farmland, etc. Not to mention that many commodities are priced in dollars. << yes, longer term i am bullish on all these. >> Those are small economies with relatively limited investment opportunities << there are opportunities, you just have to do your homework and uncover them. south africa has one of the largest stock exchanges in the world. >> IIRC in the 70's the economy alternated between boom and bust << unless you're talking about commodities, mining, energy, etc what boom was there in the 70's? i don't recall any boom. >> Since we are now in the bust part of the cycle the boom may be just ahead << you assume that when something goes bust it just bounces back in a jiff? come on, after a bust nothing ever comes back quickly. >> This might well happen if the Fed overshoots like they usually do << what more can the fed do? they are lowering rates at a rapid pace and printing money at high rates as well. yet the economy has hardly budged. so you are wrong to assume that the fed is in the driver's seat. >> As for inflation, this might become a problem if the economy booms and runs into energy ( or other commodity ) supply constraints again << the economy doesn't have to boom for this to become a problem. the only reason it isn't a problem right now is because demand is falling off so steeply due to weakness in the global economy. any pickup (even modest) in economic activity and prices will shoot higher. look at oil. everyone loves to jabber on about how oil and energy prices are plummeting and how that's a boon for the economy. well if you look oil is actually flat on the year. considering the fall-off in economic activity around the world it's quite telling that oil is still flat on the year and nearly 2 1/2 times off the lows of a couple years ago. it's quite naive for some people to think that commodity prices will conveniently remain subdued while economic growth rebounds so the bulls can have a perfect set of conditions to juice their bubble stocks higher. it's also naive to think that commodities will go from extremely cheap prices to "normal prices". it never works that way, imbalances usually over-correct and commodity prices will not just return to "normal" valuations, but will probably overshoot and go to high valuations.