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

To: Raymond Duray who wrote (44183)	1/2/2004 2:11:55 AM
From: Seeker of Truth	Read Replies (2) \| Respond to of 74559

Still if I borrow at 24% I want to at least make the 24% back by the rise in price of those furnishings. In fact since we are to take some risk here we would really prefer something like a 28 to 30% rise in prices. Let's remember that I'm borrowing US dollars. If I use the money to buy euros instead of furnishings and the euro goes up to $1.50 in 12 months I've lost money big time. "Inflation is raging." Sure you're absolutely right. But the quantities are important not just qualitative directions. If I get smart(?) and borrow US funds at 24% I'll be cheated by my own fantasy, i.e. that the furnishings or the Euros will appreciate in US dollar terms by more than 24% over the next 12 months. Goethe said that we should treat people as if they already were that which they are capable of becoming. That's fine as a recipe for personality change etc. but it never works for investments. We absolutely must go by what is, and the all important RATE at which it is changing, not only the direction. Cigars may be increasing in price now, but I doubt that they are a good inflation hedge, for example. All the cheating on COLA increases won't help me pay that 24% that I've agreed to pay. It's totally irrelevant to the issue here, which is purely a quantitative one.