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Non-Tech : Money Supply & The Federal Reserve -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (931)	8/17/2003 8:57:15 PM
From: glenn_a	Read Replies (2) \| Respond to of 1379

Hi loantech. First let me say I enjoy reading your posts on the Precious & Base Metals Investing Forum. I too subscribe to Claude's Ormetal newsletter and I own stock in a few companies who's names might be familiar to you ... like Cumberland and Chesapeake Gold. (smile) Re: China floating their currency ... well, eventually, I would say it's pretty much a certainty that China will float its currency ... it's just a matter of how long it is before this occurs ... and admittedly, it could be some time. Will the renminbi be revalued upward in the near future? Well, we're talking high geopolitics here. And China is playing a much stronger hand than the U.S. at present IMO. China is the U.S. in the late 19th/early 20th century, whereas the U.S. can be compared to Britain at the time, a declining empire. China obviously would "rather not" see the renminbi revalued upward, but if the alternative is a collapse of its export markets in the U.S. and Europe, China would be hurt very hard by this alternative - hurt perhaps harder than any other country in the world by a global deflationary collapse IMO. Sort of like the emerging superpower, the U.S., was hammered extremely hard by the 1930's deflationary collapse. In comparison, Britain fared rather well in the 1930's. A global deflationary collapse would hurt China a heck of a lot worse than revaluing the renminbi upward by say 20%. Also, don't know about your perspective loantech, but while I am long-term bullish bullion, unlike Puplava and perhaps more like the EWT folks, I am positioning my portfolio for a serious deflationary headwind coming either this fall (a strong possibility) or the spring of 2004. The fracturing of the global financial system that will be the proximate cause of the onset of serious deflation IMO, will result in a mad scramble for liquidity. I expect gold bullion to fare reasonably well during this period, I do not expect the same of precious metals shares. What's your thoughts on the matter. The strong growth in MZM and other monetary aggregates is all credit-based, it's not REAL liquidity. At some point, when the merry-go-round stops, there will be a scramble for liquidity. Would be interested to hear some different perspectives on these topics. Regards, Glenn