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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (4417)	8/29/2001 11:32:02 PM
From: Chip McVickar	Respond to of 33421

John, >>The Global MacroEconomy has been running a 30 year experiment, to test the efficacy of free floating currencies and we're all still collectively trying to evaluate the results of this process. << It seems that the "free floating currencies" are a natural out-growth..., and a natural extension of the technological advances our world psyche has made in connecting ourselves to an international communications network. Don't believe we'll ever see what JUDE WANNISKI would like us to do with a return to the gold standard...! But I do believe we'll see a floating but stable currency rate system as determined by 3 major blocks..., the America's---Asia---Europe, and probably before we all roll over. <smile> And these rates might be in close parity as the baby boomers fade away. A new population is taking over.., with new priorities and it will be different then 1945, when everyone used AT&T phones with party lines and TV was just about to be come a known invention. America's domination will not last forever...! IMO a new link to gold will never happen..., it's intellectual gymnastics, and backwards looking. The experience should have persuaded policymakers even then that a floating unit of account could do deflationary as well as inflationary damage. Here we are again, though, puzzling at the odd behavior of the financial markets, debating whether the dollar is too strong or too weak, and not quite realizing how heavy a price is being paid by everyone on the planet for not having a fixed standard of value. The average price of gold over the last 10 years has been roughly $350, but it is now around $270, a clear indication the Fed has again been engaged in deflationary policies that have accumulated over time. The deflation will surely be ended when it becomes painful enough, by accident or by design, but when it does come to an end, there really should be serious consideration given again to a new international monetary system with a link to gold.