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To: Maurice Winn who wrote (36282)	7/19/2003 4:57:53 AM
From: maceng2	Respond to of 74559

Thanks. Many inventions, some good, and some bad have come from China -g- The first historical examples of fiat money was that of China. Although paper fiat money was associated with China through the writings of Marco Polo, Chinese dynasties resorted to fiat money only in extremely desperate situations, and Chinese experiences with fiat money were that it tended to result in hyperinflation. wikipedia.org

To: Maurice Winn who wrote (36282)	7/19/2003 12:33:50 PM
From: jim black	Read Replies (1) \| Respond to of 74559

Hi, Mq..."Rising Sun" was actually a book turned into a very watered down film story (Sean Connery and Wesley Snipes) about Japan, those days it being feared by some in the West as the country that was going to buy the USA. There was indeed a sense of terror. That was when the Nikkei was near 35,000+ or so as I remember. It did prompt me to read some non-fiction books about Japan. I was afraid of Japan and I thought with good reason. But then look what happened. As you see... Somewhat related: I have read everything I can find about current economic events from all angles these days. I have the time away from part-time practice as I am now temporarily out of the office, leaving the Sovereign Soviet Republik of Kalifornia to go back to the Washington Peninsula. I have begun to develop a sense of where I think the US economy is heading, "premonition" is probably the better word as it introduces a clear understanding that the expectation has absolutely NO scientific basis for what I have begun to anticipate. I, like many of us here, regularly watch CNBC, Fox, CNN, and read a variety of newsletters online. One of my quite trusted sources is Martin Weiss' Safemoney report, but even though I pay a subscription for the service I think his opinion about impending massive deflation is dead wrong in the near future. Some of the most interesting comments in that letter are epistles from his late father who prospered during the Great Depression by shorting...he had/has a question worthy of a plaque over the living room and bathroom wall, "Ask what are the vested interests of whomever is giving you advice"...uh oh! There goes every talking head on CNBC, as they want our money (well to be generous then most of them.) We should to our betterment try to separate the various religious factions that include the Permabulls and Permabears as irrelevant. We face a market of stocks with ridiculous valuations by historic standards. We face a slow and stalled, debt ridden economy despite 13 interest rate cuts by a seemingly calm Greensputin. We face an accounts deficit in the US economy of 44 trillion dollars if looked at from what the US expects to get from all taxable sources vs what has been promised, ie, social security, Medicare, Medicaid, military spending, pension funds from former government employees including retired military and civil service, etc, the list is not endless but very long, etc, etc. between now and 2008. 44 trillion is approximately four times GDP in good years. Some apparently took from Greensputin's remarks this week that he disavowed Bernanke pronouncements about not letting the US slip into deflation (read depression). What's my bottom line as if it is worth a damn except for further discussion? With the current situation, complex as it is, and the numbers above as liabilities and realities, I believe that if there is a deflation, it will be only temporary. The end result to my simple mind seems to be the inescapable conclusion that we are headed for at a minimum, Carter era inflation, say 18+%/year inflation so that the government can bail itself out of those promises it has made. I have no clue as to how long it will last, but it leaves me inclined to stay very short term and nimble, short term treasuries and TIPS being the only non-PM haven. All just my opinion and of course not having even mentioned the effects of what Buffett calls the INEVITABLE use of a nuclear islamic strike wihin our borders. Who am I to argue with Buffett. I have made no secret here of my opinion of Islam so I can feign no horrified surprise at such an event. I have my money where my mouth is...no debt, house free and clear, 30% in TIPS, 40% in short term treasuries, 8% in gold fund CEF {gold and silver bullion bought when a 6% premium, it having been as high as 33%! not long ago} and bullion coins in a safe place, the rest in money markets, that 22% making me nervous and soon to pull the trigger on putting more of that in one of the above, all this stated for point of full disclosure. So who is buying stocks these days? Certainly not this old fart. And certainly not longterm US bonds. I consider the 5 year note LONG TERM in this environment. cheers Jim Black