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To: reaper who wrote (225216)	3/4/2003 11:39:31 AM
From: Perspective	Read Replies (1) \| Respond to of 436258

<we're all searching around for the inflating asset in the credit bust. maybe there will be none. the bear market eats the bears too <g> > You could be right, but I think the monetary authorities will respond with tactics that sustain the money supply. It will crush corporate America as they are squeezed between falling end prices and rising costs of inputs. In the end, this all depends on whether the money supply goes up or down. If Bernanke succeeds in running the printing presses to counter the natural deflationary tendency, then you will see increases in the prices of commodities. If he fails, then everything collapses. Again, that's why I advocate being short stocks and long gold. If reflation succeeds corporate America gets squeezed and gold skyrockets. If reflation fails, stocks collapse and the gold should maintain its purchasing power or increase it in a flight-to-quality. Your deflation-wins scenario has to be right in order for the bond trade to work. You have to have a decline in the money supply for you to win by holding bonds. Also, since bonds are a promise to repay in Greenbacks, you have to trust the guy running the printing press, and I sure as hell don't trust those nutjobs. Funny, I never noticed - Greenback, Greenspan - musta been fate! BC