Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Bilow who wrote (89397)	5/23/2004 2:21:18 PM
From: Jdaasoc	Read Replies (2) \| Respond to of 93625

think we're headed into an inflationary period that will make any small gains in equities lose money, relative to commodities. Sort of like the late 70s I couldn't agree more. You can't have both guns and butter and not pay for it. I traveled down NJ Turnpike near Fort Dix a few weeks ago and passed a large convoy of beat up 2 1/2 ton trucks being transported on trailers. Many things gained from that observation: - We have war time economy like late 60-early 70's - No reservists left to drive these trucks government had to pay trucking companies to trailer them. - Trucks were old and beat up and probably would have broken down on the road if driven. - Military is going to have to spend many hundreds of millions to replace all the stuff blown up and discarded on road to Baghdad. Stagflation was worry back then just like now. Only difference now vs then was Nixon was disliked but still respected pre Watergate and he could pull stuff off like wage and price controls. He was able to keep prices artificially frozen at a stand still for months on end only to have inflation blow up real good after they were removed.

To: Bilow who wrote (89397)	5/23/2004 4:50:17 PM
From: im a survivor	Respond to of 93625

<<I think we're headed into an inflationary period that will make any small gains in equities lose money, relative to commodities. Sort of like the late 70s. (a) We've got a hopeless and endless war that we're not paying for. (b) We've got huge numbers of dollars overseas due to years of trade deficits. (c) We've got a huge pile of government debt that will be much easier to pay back with inflated dollars. (d) Under Clinton, the government reduced the amount of government debt that was in long term instruments (like 30 year bonds). This makes our interest payments more variable on short interest rate changes. (e) Right now, our interest rates are as low as they get, from things get more expensive, both for the government and for any business that borrows money. That's inflationary. (f) Bush's foreign policy has made the US into a bit of an international pariah. This will make it less likely that foreigners will want to hold dollars. When we start going down, everybody is going to stand in line kicking us. Under these circumstances, I would suggest holding cash (i.e. bank accounts or 6-month T-bills), with some gold and gold stocks, or other primary producers like oil. It might be a good time to invest in US companies that still produce in the US, as a dropping dollar will help these companies. >> I agree with much of this, although I still think one must have some exposure to equities, depending on age and individual situations.....But, very good points.......