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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Sharp_End_Of_Drill who wrote (21215)	11/3/2002 10:56:45 AM
From: Mike M2	Respond to of 36161

Sharp, when perceptions change to the " all looks bleak" paradigm - stock prices will be substantially lower than now. The credit bubble created malinvestment, excess capacity and historic private debt burdens. IMO the stock market has not come close to discounting the problems created by the credit bubble. One factor which exacerbates the debt situation is that much of the corporate debt was not used for productive purposes but rather for mergers and acquisitions ( this increases the size of one company but does not add to the capital stock of the nation as a whole) and share repurchases. Joseph Schumpeter said the market rewards productive use of credit but punishes all other uses. Mike

To: Sharp_End_Of_Drill who wrote (21215)	11/3/2002 11:20:31 AM
From: longdong_63	Respond to of 36161

Sharp...the bottom...well know when the time is right to buy in when the common household word "stocks" are taboo, when the NAZ volume drops from say 1.5B avg to .5B average, when the Ex-CNBC girls are doing tricks on Wall Street to pay for their next manicure, when you can buy a current $300K house from the bank title free for $50K, when more major corporate bankruptcies occur and the debt load is lightened, when the USD falls to a minimum of 90, when historical PE's of 14-15 drop to 5-10 on the bellwethers, etc. By then gold will have exploded so most likely, it will be on it's descent into the abyss. What fun...a 2 way ticket to ride and the majority of the public doesn't see it. Ssssssshhhhh!!! LOL!

To: Sharp_End_Of_Drill who wrote (21215)	11/3/2002 6:57:49 PM
From: Jim Willie CB	Respond to of 36161

SharpMan, I appreciate your words, thoroughly pondered here believe me I have three scenarios in mind 1. total financial breakdown, chaos, spiraled US$ crisis 2. shockwaves of financial crisis, endured, survived 3. continual challenge, muddle, endured, rebuilding in each scenario, gold benefits each open up into a stagflation environment #1 sees a horrendous devastation, with stagflation later #2 sees very bad devastation, with stagflation sooner #3 sees a secular bad bear, with stagflation right away gold wins huuuuuugggggge in #1 gold wins biggggggg in #2 gold wins handsomely in #1 where you and I seem to differ is the degree to which this SITUATION feeds upon itself I call it appropriately the Vicious Cycle of deflation, dollar decline, trade gap nonresponse, imported inflation, commodity shortage, continued debasement of major currencies, producing a really tough environment of stagnant economic growth, debt suffocation, and commodity inflation arriving from a path of least resistance to money creation I expect this SITUATION to get more out of control we are already starting to hear in the more responsible corners of press/media that the USGovt and FedReserve are seemingly not in control as much as we mere mortal illiterate citizens believe expect more gradual erosion into mild chaos thanks for the words of wisdom I am a step ahead of you on this issue / jim

To: Sharp_End_Of_Drill who wrote (21215)	11/4/2002 2:20:30 AM
From: tahoe_bound	Respond to of 36161

Good post. There are 2 kinds of debt, constructive and destructive. This is usually forgotten in the course of discussion. Focusing on individual debt, of which granted there is plenty, destructive items generally fall under the classification of general credit card debt (unless perhaps to short term fund a small business or property to be fully paid off in a short term) automobile or other motorized craft debt, going on a shopping spree with a department store line of credit, bad business debt, taking a loan for a vacation, tax liability debt, and home equity debt to fund the purchase of a depreciating consumer item. There are more of course. Constructive debt categories would include those items which are considered investments in both tangible and intangibles to make a return. Real estate (for the long term focusing on the debt being paid off early hopefully education debt, small business/enterpreneur, again there are more in this grouping as well. In bad times, of course all won't look that great. Humans strive by nature though, to better their situations. In my opinion, those engaging in CONstructive debt should they feel the need to do so, should by and large not be lumped in with those frivolous consumers who are going into debt out of basically stupidity, not instead with the intent of using a constructive debt situation as an investment for future betterment. Disclosure: Debt free now, 100%. Some time ago, used several credit cards for cash advances to start restaurant, as there was no other way to fund without experience, promptly paid the whole $50k off in 18 months. Another time during the bell bottom era, went into debt to buy a home. Another time, went into college debt for wife. Each of these situations bettered our families, and hopefully helped others along the way. I commend anyone using debt in a must need situation if they are using it constructively to "get ahead", have a plan to pay it back ASAP, and don't feel sorry for the destructive debt types. There is likely a large amount of debt that would be considered Constructive, most real estate. With a caveat, anyone paying very little down and getting into a mortgage far above their means is not being constructive. Anyone discounting that real estate values could fall 50% could be in serious trouble, those who plan for any contingency will be in the best shape. Most large U.S. corporations by the way, seem to be of the destructive type these days.