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

To: TobagoJack who wrote (26192)	12/16/2002 10:17:01 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

Jay, I do indeed recall that exchange and also one in which I thought maybe you could stretch it to $335 - $340 this time, before betting again with Uncle Al. The 10Q:Au ratio is still well in favour of phragmented photons at 400:360, but 10% is neither here nor there and I will not be surprised to see yet again the gap narrow and reverse. Aztecs do not just fade quietly into the night - their descendants are still rattling around the cage somewhere. Your vacillation on whether to sell or not is reasonable. I'm suffering similar dilemmas. The difficulty is that swapping out of magical light sabres or Aztec totems leaves the question of 'to what?' Uncle Al has beaten dollar holding savers for 2 years now, taunting them with low, lower and lowest interest rates while diluting them with umpty billion new pixelations of new ones. They will and are gradually getting the message that they had better go shopping with their dollars instead of holding them. Many have gone gold shopping, looking for a haven against dilution. Many have gone lunging back into the rising stock market in desperation. Many have bought houses and have borrowed money to do so. They have also bought cars and a lot more besides. But despite the huge dilution, thanks to the productive enterprise of China and the creative genius of people like the cdma2000 inventors, inflation remains zero and in fact people are worrying more about deflation. Which my good buddy Milton Friedman and I both think won't be a problem - just hit "print". There was a time when a sudden collapse of the overheated market could have precipitated a sudden black hole implosion but despite the wobbly Japanese and other situations, too many years have now gone by for a cascading collapse into deflationary mayhem. One problem with gold rising is that supply and demand is a factor in gold. With less wealth-effect and with economic woes, I suspect the resulting drop in demand for gold will exceed the demand from people looking for a haven from inflation [or dilution of their dollars]. Especially since there seems to be zero inflationary pressure. Holding cash, even at a near-zero interest rate doesn't look like a purchasing power loser. So why flee to gold? I think you can take your profits again at $440 and wait to bet again against Uncle Al [perhaps paying down some of your yen debts while you wait]. My dilemma is what to do with a Tonka Truckload of US$. Wait for a swoon in stocks I guess. Too many have taken off without the benefit of profits to provide propulsion. Money needs to come from customers these days, not investors. Investors want to see customers provide a greater share of cash flow than was accepted in the past. Mqurice