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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (11841)	5/31/2004 11:48:52 PM
From: Roebear	Read Replies (2) \| Respond to of 108642

too early, There were substantial, though not catastrophic, ups and down in dollar value during the 80's and 90's. 85-87 there was a big drop in the value of dollar (Plaza Accord), readily seen on long term charts. But there is more, during 70's, the dollar dropped in value, equity markets were mostly very bearish, demand was high (boomer's starting households?), there were rolling shortages of various and often mundane daily items, things from paper bags and toilet paper to coffee. This was explained as a lack of profits equaled a lack of production. American travelers overseas at times had the odd experience of having their dollars refused. Interest rates AND inflation were high. Now listen to these little anecdotes of mine, compare then and now: Back in the 1974 I had $3000.00 cash to buy a $3500.00 new car. I had some considerable difficulty loaning the $500.00 needed to buy. True, I was young and did not have a long credit history, but what credit history I did have was stellar and I had a savings account for ten years and a checking account for three years. Having 85% cash down for a vehicle and having difficulty getting a loan for the remaining 15%, can anyone imagine that happening now, in this economy?? I recall a banker recently being quoted as saying that any person turned down for a mortgage, in this economic environment, would have to be a convicted arsonist. I would hypothesize a difference between now and the 70's I believe is that the reserve requirements for banks were more stringent in the 70's, perhaps because the gold standard and silver coinage were a more recent memory. (I know it is a fact there are less reserve requirements now, but do not have the figures or links to that info at hand). In other words, circa 70's, they had to have some cash reserves and they were willing to pay interest to rent your money so they would have reserves to loan out more money. The appearance NOW is that they do not seem to need any cash reserves, just a willing Fed? Why do I say that?? The other day I walked into a bank and, out of curiosity, asked what the rate was for CD's. Now this never happened before, not in 40 years, that a bank would not tell me what their rates were for CD's!. To find out the banks CD rates I was supposed to make an appt. with a broker like person, who was no doubt going to try and sell me on some bond funds or perhaps (at best) some T bills or muni bonds. No toasters, and not any interest to speak of! Certainly, they had little "interest" in my money, but would be quite willing to sell me some of their money at 6% (mortgage) or up to 10% (unsecured personal loan) or 18% on a credit card (not counting intro rates). It is true, as any wag might say, that the bank might have been too embarrassed to tell me their interest rates on CD's (and as well they should be). But to me it also speaks loudly that few banks seem to desire depositors cash these days, any more than they might desire an 80's Commodore computer. Best Regards, Roebear