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

To: LLCF who wrote (21497)	7/21/2002 5:57:01 AM
From: TobagoJack	Respond to of 74559

Hi DAK, I view gold as ‘just’ and ‘only’ another currency, of a nation without borders and a state without government; not at the whim of whining electorates, nor at the mercy of bullying tyrants. If we accept gold as such, then we see the following, as clear as a potato in a bowl of rice, or a tomato surrounded by bananas: (a) If the world and all its large nations are inflating, then the kingdom of gold is also inflating, with gold going up in price as a consequence of its intrinsic ‘shelter from inflation’ characteristics; (b) If the world and all its important states are deflating, then the empire of gold is deflating, with gold going up in value as a result of its innate ‘freedom from intervention’ charms; and (c) If the world and all its consequential territories are at peace, developing constructively, minding its own business, then gold will be neglected due to the convenience of dealing with clicks, blips, digits, and decimals. So, yes, <<… I am aware that GOLD should do 'OK' in a deflationary as well as inflationary environment>>. <<1.) With the massive run up in debt, the coming implosion must be VERY deflationary unless the fed buys enough of it. 2.) A flight from paper assets due to #1 could include gold and gold shares at least initially no???>> … and real estate. <<3.) What is anyone take on the FED being able to fight #1 above and what to look for in deciding they are winning [inflating the hell out of everything] that battle>> The FED may win or lose the fight in fighting deflation, but the splash damage itself will kill many, due to wrong asset allocation and/or slow transition from one correct allocation to another correct allocation as the battle progresses. The toll will be terrible. In the final reckoning, if it is inflation a CB wants, a CB and its population will get it, good and hard, the impolite way. <<4.) It is when #3 takes place that I think one would want to be leveraged fully to POG>> … but for the possible stupidity of Central Banks and officialdom intending to defend the indefensible until the last consumer, and each tax payer, even if it costs them every ounce of CB gold. <<5.) I am long gold and shares, but not super aggressive because of my concerns of #1 bashing the piss out of everything including metals in a panic to raise cash... and would like to have a game plan going forward in deciphering when to go hog long>> I think even if one were to want to go insanely hog piggie long, one should only do so for a short period, and trim back. The force of intervention, in the final analysis, is very strong. No sure bets in this game. But I believe it will be a fun and profitable game. Chugs, Jay