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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (15165)	11/8/2004 4:30:06 PM
From: RealMuLan	Respond to of 116555

LOL -eom

To: Knighty Tin who wrote (15165)	11/8/2004 5:16:39 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Date: Mon Nov 08 2004 15:08 trotsky (Preacher@debt) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved i believe one must differentiate between government debt ( plus future unfunded govt. liabilities ) and total credit market debt, which includes private sector debt. it is in this department that the US is now the undisputed 'leader' of the industrialized nations, by amassing a total credit market debt that surpasses it's previous record high ratio to GDP dating from 1929/30 by a huge margin. it's a disaster in waiting, in spite of the fact that few mainstream economists ( or Fed officials for that matter ) seem to take it seriously. it rests largely on a shaky foundation, since it is mostly collateralized with wildly inflated residential real estate and has been used almost exclusively for consumption purposes. it is no wonder that the currency of which this debt is made is increasingly suspect - and will likely remain so for some time to come. btw. in this context, the major difference between the euro-zone and the US is that the euro-zone actually sports a sizeable savings rate , while savings rates in he US are abysmal. savings and investment however go hand in hand ( an indisputable economic truism ) and it seems clear that long term economic health is NOT compatible with ultra-low savings rates. Date: Mon Nov 08 2004 14:26 trotsky (frewils, 9:28, ) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved first you say: "Most people would do well to forget about psychology of the markets regarding gold and precious metals investing." this is tantamount to an invitation to disaster. the market's psychology is probably one of THE most important data points worth paying attention to. but then in your 9:47 you go one step further by exclaiming: "STOP THINKING" i'm sure there are a few people for whom it isn't too difficult to implement this advice, but i for one don't intend to stop thinking. mind you i don't disagree with the premise that the metals are probably in a long term bull market - but rule number one is that the market will do whatever it wants to do, regardless of our expectations or convictions. i happen to remember that every gold rally since the 1980 top has been greeted with the very same enthusiasm. even in the event of a secular bull market, drawdowns in the inevitable corrections can be very large. in the last secular bull in the 70's, many gold shares corrected between 60 and 90% in the '74-'76 correction for example. sitting through drawdowns of this size makes no sense whatsoever, and avoiding them isn't done by ignoring what's happening.