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

To: LLCF who wrote (14303)	2/1/2002 1:04:20 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 74559

<support for my conspiracy theory???>No, just recognition that if there are 100 kg of gold and 100 kg of Uncle Al's currency and Uncle Al prints another 100 kg [which costs him almost nothing except signing a piece of paper], then the gold is going to be worth twice as many kg of Uncle Al's currency. That doesn't mean that gold was a great investment. It just means that gold was much better than cash. Better still than gold is a productive asset which does something useful, such as a CDMA patent. People forget that a far bigger bubble than the stockmarket was the dollar market. The value of the dollar has been shredded over the past year as interest rates were lowered by Green$pan from 7% or so to 2%. He is telling everyone in no uncertain terms that they cannot expect to sit around holding US$ and earn enough to live in luxury. They had better spend their US$ on something useful, either by investing in productive assets or buying some goods and services. The US$ bubble ended a year ago. Interest rates were at a high. Now they are at a 40 year low. The old idea of getting 7% has been destroyed. That means the old idea of getting P:E of 10 has also been destroyed. P:E of 10 is much too high at a time when people should be out shopping instead of investing. The competition for returns on investment has become much more serious over the past year. It's no longer just a matter of watching a bank account grow or a stockmarket boom. Now it's a matter of putting a very fine point on a pencil and looking for details [such as just exactly how Enron's business works and exactly who will buy Global Crossing's and Globalstar's photons]. It's time to abandon interest-bearing deposits and buy some productive asset [or service] or sit on gold if one lacks imagination and creativity and believes that particular "greater fool" idea will hold for the duration. Mqurice