Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Stock Farmer who wrote (12833)	1/6/2002 6:19:29 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

John, you do make very good points. But with little gaps. For example, we need to define 'full faith' when discussing fiat currencies such as Uncle Al's versus a share-backed currency such as Dr J's. Uncle Al promises to maintain the value of the US$ by increasing or reducing the supply of it so that a basket of goods and services increases in price against the US$ by between 1% and 3% a year [give or take a little]. That means, he promises to dilute holders by that amount each year. He also, along with politicians, promises to keep things on the straight and narrow decade after decade. Some people don't trust Bill Clinton's promises, or Condit's or Ted Kennedy's or Trent Lott's or a lot of others. They know that Uncle Al won't be around a decade from now and he would probably not be the best person by then to be running the show anyway. The holders of the US$ don't have a say in the management of it. They take it on trust that the US is capable of keeping the dollar on the straight and narrow. At current interest rates and inflation rates they need to do that for several decades before a lender gets their money back. At any time, the currency could do an Argentina if the world decides that the US$ has had its day and the full faith and credit of George W and buddies isn't what it was in the good old days. A basket of the world's companies on the other hand, actually represents real productive capacity and the efforts and needs and wants of billions of people. In Argentina, companies won't all go bust because a currency evaporates. They switch to US$ or some other means of exchange and go right on buying and selling. The underlying concept of democracy is that inherent value rests in the proletariat, the masses, the man in the street, we the people and their drives and productive capacity. The underlying concept of communism and totalitarianism is that the state is the keeper of the flame and should centrally control the means of production and much else, including the means of exchange. You are right that gold has many applications other than a store of value or speculation. The question is whether the stores of gold are much in excess of demand for real uses from wedding rings to electrical connectors. If they are vastly in excess of demand, then the store of value issue becomes important, a bit like OPEC oil is vastly in excess of current demand and is being used as a store of value for decades hence [at some risk to those hoping for higher values by storing their oil for future consumption]. Yes, it's nice to daydream. In 1989 I imagined how Fourier transforms could be used to code and decode cellphone signals to expand capacity. In about 1994 I imagined how single pulse signals could be used to further increase capacity. Both those things have come to pass. Those who imagine the future are in a position to create it. Those who don't, aren't. We create our future. We define reality. We are reality. What is real now is a function of dreams of people past. Mqurice

To: Stock Farmer who wrote (12833)	1/6/2002 11:06:56 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

John, you are right that QUALCOMM has plenty of crowds but it is far from the riotous state of late 1999 and early Y2K. I was all set to bail out at the end of 1999 but decided to ride the rollercoaster down [I mentioned to my broker, when he wondered whether I'd like to buy more at $120, that I expected $50 to loom into view and I would certainly not be buying more until then - we have unique capital gains tax rules here which meant it might not be a great idea to sell high and buy low]. Now, the crowds are very mellow around QUALCOMM. The mania has gone and many in the crowd look more like hyenas or vultures waiting for carrion, than cult-members hailing the new messiah. Check posts per day in late 1999 and now to see the difference. Count the number of people posting. QUALCOMM is now mainstream and there is none of the feeling of skulking in the shadows waiting to burst forth. Q! is now on the stage and well-known and critics and analysts have pulled it apart in detail. So, it's not quite the same comparison with hanging around gold waiting for gold to be the new messiah, again, maybe. But the damn second coming for gold is sure taking a long time.... the acolytes will get impatient if there isn't some action and 2,500 tons a year keeps dropping on the market and central banks keep selling off more. Quite right that owning gold to create cyberspace is a good idea, if demand is high enough and growth in demand high enough to make gold a good investment. But I don't think demand is that great or likely to be any time soon. It doesn't take more than an atom-thick layer to make an electrical contact. That's thin! Okay, maybe it's a few atoms thick, but you know what I mean. My guess is that very little gold goes into cyberspace at present compared with production and other demands. I don't think the Q is just another fiat currency as you say. The Q represents a share in the companies so it has actual redeemable value and earnings. Fiat currencies have no redeemable value and no earnings and what's worse, you get diluted if you hold a fiat currency. The dilution by issuing more shares is different from dilution by US$ bankers because shareholders print more shares and own those shares. Central bankers print more shares [$$] and THEY own the new money, not the holders of existing shares [$$]. Mqurice