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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (15858)	8/7/2002 2:33:00 PM
From: Sharp_End_Of_Drill	Read Replies (1) \| Respond to of 23153

Jim, I'm not quite sure what you are saying. You point out all the conditions now point to inflation not deflation. I agree with that - with the possible exception that we don't know how much money is being destroyed by loan write offs & bankruptcies. The fed is inflating the money supply at an epic rate, but that may well prove to just balance the deflation aspects. My bet is the fed wins, and we have bigtime inflation. It's the only way out from under debt, except devaluation - and that will come along with the package for free when we cut rates again. Then you rebut the notion that gold isn't a good hedge against deflation, so it seems you aren't sure about the inflation/deflation scenario - much like myself. I believe in a true deflation cash and lack of debt are the way to go. In the inflation that follows commodities and all sorts of paper assets bought on the cheap are the way to go. The Homestake mining gains you refer to happened after the bottom, and were in large part due to the government putting a floor under the gold price. Physical gold is what it is - safety. I don't know how it will fare, but that doesn't affect me much anyway. What I'm worried about is the equities. I'm overweight in PM stocks and I'm afraid they will drop along with any market crash. Sharp