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

To: russwinter who wrote (10110)	3/14/2004 2:51:09 PM
From: Canuck Dave	Respond to of 110194

Good post, Russ. Puts the whole thing into a consistent context. How bad is the disconnect going to be? I'm betting on ugly, real ugly. CD

To: russwinter who wrote (10110)	3/14/2004 3:29:18 PM
From: I_C_Deadpeople	Read Replies (3) \| Respond to of 110194

Russ, Mish and others: Man you guys have been going at it with regards to the inflation, deflation, interest rates, commodity prices, etc etc. Great threads, good to see both sides of some of these issues (but with virtually the same conclusion). Allow me to pipe in just this once (and keep in mind I know only a fraction of what most posters here know so I could be talking out of my a*s here). Most of the people in the inflation or deflation camps go back to either the 30's or the 70's as the historical reference. Deflation in the 30's and inflation/stagflation in the 70's. Maybe what we are about to witness (or starting to witness) is an entirely new beast. Maybe it will be outright financial chaos - pockets of inflation, deflation, hyperinflation and stagflation all in one world melting pot. If we are indeed witnessing the shift in economic power from the US to China/India this in no way shape or form can be compared to the shift from the UK to the US some 100 years back. Russ's post on the silver manipulation triggered my small mind to start thinking about the this issue in different way. The massive population difference between the US and the East. The massive debt loads in the US. Multiple bubbles all over the place. The massive manipulation of currency, commodity prices, interest rates, etc. The globalization of physical trade. The globalization of FINANCIAL transactions and instruments. Derivatives. Multiple competing currencies, none linked (at the moment) to a gold or silver standard. There simply is no historical comparison to any of these. As the East grows in prosperity, where will the food supply come from? The raw materials? Certainly even a mild GDP growth pattern in the East will dwarf any drop in demand in the US causing constant pricing pressures. So could we see inflation in the East but stagflation in the West?. Not a global depression but country by country depressions? I think the most staggering thing to comprehend is the sheer mass of population in India/China. The strain on resources and the food chain will be massive as their people move up the economic ladder. While at the same time the US does what? Drops it's dollar to .50? I really don't see how anyone can make any kind of guess of this whole misallocation (of money, resources, competiveness), other than to say, in the end The US and the current standard of living in the US will ultimately be the loser. I seriously doubt I made any sense....

To: russwinter who wrote (10110)	3/14/2004 3:59:49 PM
From: Little Joe	Respond to of 110194

Russ: I had to read that post 3x before it sunk in. I have never heard the view expressed before, but I think it is right. Little joe

To: russwinter who wrote (10110)	3/14/2004 6:23:21 PM
From: mailcat8	Respond to of 110194

<My silver theory,(this can also be applied to other commodities): I believe that originally a defacto cartel was set up to allow excess post-communist(era and other) inventories to be liquidated in "an orderly fashion" (floor price) and in an environment of commodity deflation.> I have wondered if an arrangement might not have been set up after the Hunt brothers $50 price spike--similar to what you term a defacto cartel. I have wondered if some govt agency might have set up an agreement with a large financial institution to the effect of "just watch things with silver, do what you have to do, and don't let this or anything like it happen again. In return your payoff for this will be that you can profit however you can from your market activities in the area of silver, and you don't have to sweat the limitations that other market participants have to follow." This has just been my own speculation--

To: russwinter who wrote (10110)	3/15/2004 12:13:30 AM
From: Umunhum	Read Replies (1) \| Respond to of 110194

Russ, I am curious as to how you are playing the coming silver train wreck. I was a bit early to the party and started buying silver contracts about 18 months ago in the $4.90 range. So far I have taken delivery of 5 contracts and still have 5 more coming due in July. I have also bought a few thousand ounces in Engelhard 100 oz bars. I was late to the party on the stock side. I subscribed to an investment newsletter that specializes in silver about 6 months ago. The only "blue chip" silver stocks that I like are PAAS and SSRI and both have had quite a run lately. In fact I am shocked at how quickly they have run. It seems like somebody with deep pockets knows something. I really don’t like the juniors. They seem like a hit or miss proposition and I would hate to be right about silver and then miss the run up because I bought speculative issues. Jim seems to like CDU but I haven’t been able to pull the trigger on it. Looking back, I wish that I would have put more money into the stocks as they have done significantly better. And with their leverage to silver (PAAS CEO says its about $6.6 stock price to $1 silver price in a recent presentation) that will probably continue.