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To: Davy Crockett who wrote (17038)	8/29/2001 12:08:46 AM
From: isopatch	Respond to of 52237

Peter. Hadn't seen that July post before. Nice work! Thought your classical allusion to 2 of the most dangerous marine hazards in Homer's Odyssey was a very appropriate analogy to the dangerous situation the Greenspan Fed is attempting to maneuver the economy through right now. "A Fed forced to now navigate the waters between the Scylla and Charybdis of the deflationary asset retreat of stock prices and the inflationary action that is significant monetary accommodation" Regards, Isopatch

To: Davy Crockett who wrote (17038)	8/29/2001 6:17:07 PM
From: craig crawford	Respond to of 52237

>> As each currency broke away from gold and was devalued, a unit of each currency bought less gold than before – that is, the price of gold went up… << this is inflationary, not deflationary. in a deflation cash is hoarded. cash is king. the conditions you describe are where people are afraid to hold currency and switch to something real that cannot be debased....such as gold. >> In contrast, the prices of goods and services in all countries had fallen by substantial amounts << when? the time period i was debating was 1933-1934. prices rose across the board in that timeframe. >> The result was that an ounce of gold in the mid-1930’s could buy twice as many goods and services as that same ounce could have bought in 1929 pg. 323-324 << like i said, by the time the mid 1930's rolled around fdr had raised the price of gold just like he successfully raised the prices of many other goods. he was using deliberate inflationary measures to counteract deflation, and he was successful. if one wants to make the argument that gold does well during deflations, then someone explain to me how the japanese have done well holding gold the last 12 years during their deflation? >> In deflationary monetary conditions Gold holds it value, unlike fiat currencies << without getting into a debate about whether gold holds it's value or not, i can simply counter that cash performs even better than gold, it increases it's purchasing power as prices fall. >> Who am I to argue with Gerald Loeb "Gold shares are devaluation hedges << devaluation is not the same as deflation! it's the opposite!