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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (6081)	1/24/2004 8:54:44 AM
From: re3	Read Replies (1) \| Respond to of 110194

misheldo-if i understand from following your postings, you are currently involved in different options/futures types plays on interest rates,etc, but NOT in gold/gold shares...let me ask about gold bullion itself...under what circumstances/price range, etc would you suggest putting a significant amount of $ or an "insurance" amount of money in physical gold/gold coins, etc and leaving it there for that proverbial "long run" (into the ice as you put it -ng-) ps. nobody pays any attention to me in real life when i tell them i think a basic 2 bedroom house here in a not so special neighbourhood can fall from $ 250k to $ 180k (or more)...and then when people talk condos, i wonder otoh if the "monthlies" (taxes, fixed maintenance fees) aren't going to run up and double in the next few years... -ng-: there's gonna be pain one way or 'nother...

To: mishedlo who wrote (6081)	1/24/2004 10:41:42 AM
From: Little Joe	Read Replies (1) \| Respond to of 110194

The isssue isn't so much can we inflate our way out of debt so much as when the piper will be paid. It is political suicide for those in office to admit they screwed things up and tell us we have to take the medicine. Ergo that will not happen until everything else has been tried. What else can they try? They have lowered interest rates about as much as they could to no avail. Increased the money supply to no avail and now they are devaluing the dollar, which I do think will have a jobs creating effect on one hand but goods will be more costly on the other hand. Since we live in a debt economy and many people are maxed out they can't borrow to buy more. In this situation, the government can just give more "tax refunds". Will this work. Probably not. But it will forestall the situation. Undoubtedly there are many devices they could implement which do not occur to most of us. (Never discount the ingenuity of politicians when it comes to staying in power.) At some point in the future the situation will become so unbearable, perhaps like post WWI Germany when reality will have to be faced and I suspect most debt will be liquidated through bank ruptcy. Of, course the time frame is the question? Of that, I have no firm opinion. Little joe

To: mishedlo who wrote (6081)	1/24/2004 4:38:43 PM
From: westpacific	Respond to of 110194

""""False Dillema: Prechter vs. Inflation."""" GREAT POST AND RIGHT ON DA MONEY. Think about this, the FED is already in deflation mode, they SELL credit, that is their job, cutting rates to almost zero - this is deflation, they cut rates to SELL their goods, C R E D I T. If they could get a higher rate they would not have cut! PLAIN AND SIMPLE. THE ENDGAME IS NEARER THAN MOST UNDERSTAND>>>>>>>

To: mishedlo who wrote (6081)	1/24/2004 8:18:23 PM
From: yard_man	Respond to of 110194

don't disagree with what you say, except that -- inflation -- the narrow term meaning an increasing price level -- WILL be seen on a relative basis -- after all, when financial assets implode -- it "feels like" the prices of commodities, foodstuffs and certain "necessary" services are rising parabolically, when all the stuff supported by debt starts finding the new clearing prices. The debt isn't worthless or the stuff supported by the accumulation of debt -- it just happens to be worth a WHOLE LOT LESS relative to the daily necessities ... that's what misalloction is ... that's my theory and I'm sticking to it. That's why you want to own gold through this deflationary period. People think of gold going to the moon, when IMO -- it is that these other "bubble assets" are really finding a "real" clearing price relative to gold. So we can cry all day long about government statistics regarding inflation -- but the indices are narrow and wrong-headed in the first place ... there is no "right basket" of prices. The Fed should never have targeted such anyway. You won't find the true, huge imbalances there. The imbalances are a product of targeting the basket in the first place. Falling prices, by themselves never hurt anyone -- that fellow Shostak has made the pt over and over again and made it well. Falling prices mean an increased standard of living -- all other things being equal -- it is economic progress, if the money supply is reasonably stable. The debt bubble results in gross miscalculation of the profitability of new ventures on the part of business owners as they look at the bogus rates of growth, and bogus interest rates. Consumers likewise become befuddled about what is the "right level" of debt to carry. At some pt consumption gets so extended and profitability wanes to "production cost" squeeze -- capital goods must fall rather quickly in price to find their clearing prices -- in line with not the prior sustainable level of consumptive demand, but temporarily -- a much lower level of demand. Banks are less willing to loan money ... and there you go -- self-reinforcement on the downside. Re that post I did on the local museum -- no doubt the folks who bought those bonds thought they were getting in on something safe. Big business name behind the project. Two former presidents of the USA honorary members of the board. State kicking in money ... now they are lucky to get .60 on the dollar. So it goes in an era of extreme and reckless confidence. While Bush and the Feds are going ape after ENE's hucksters -- we shouldn't forget who had a big hand in writing the energy policy -- who had such wonderful and free access to the white house. Has anybody seen any bankers who aided the set up of the whole business charged?? Of course not and you won't ... The Federal government -- deficiti spending, monetary hijinx, support of fractional reserve banking is about as honest as the scheme that once was ENE. It's all about confidence -- nothing else.

To: mishedlo who wrote (6081)	1/26/2004 6:57:22 AM
From: gregor_us	Read Replies (1) \| Respond to of 110194

Mish: You are over-committed to a basically correct thesis--that we are operating essentially in Deflation. Inflation exists only in ones mind. Not reality. You indicate no room in your analysis for the areas of re-flation, where the Fed has so far been successful. I suggest you review the Economist Magazine's index of Prices and Commodities, as priced in dollars over the last 1, 2 and 3 years. As you know, I strongly suspect the present Washingion Reflationary effort to fail, and the Debt will be dealt with by Deflation, not Inflation. But alot of inflationary effects can erupt between now and then. And they have already.

To: mishedlo who wrote (6081)	1/28/2004 5:18:54 PM
From: Real Man	Read Replies (1) \| Respond to of 110194

M., we may be headed somewhere in between. The debt will not be repaid, but prices on essentials will rise. The US dollar is like a bond of US of A - if the debt of US of A is not repaid, it goes down in price. And US owes everybody, since everybody outside US has dollars. Non-payment of US debt to other countries would mean that the dollar will need to crash, like Peso in Argentina. This would mean hell - higher rates, lower stocks, lower dollar, and higher commodities. Inflation? Well, nobody will buy anything tech, so there you'll have deflation. But we all have to eat. There will for sure be one heck of a deflation outside US. Gold could drop, along with gold stocks, in currencies other than USD. Or, it could rise if only a tiny portion of all investors start seeking safety.