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

To: michaelrunge who wrote (22229)	11/21/2004 9:04:02 PM
From: Wyätt Gwyön	Respond to of 110194

i've got to think a pandemic would be very deflationary. i mean, 20% less people on the planet? (including us, maybe? gee, can i short myself? :) OTOH, deflation is not very good for heavily indebted currencies like USD ($54 trillion NPV debt for public debt plus future obligations, but i guess those obligations would be lowered along with the population :( i think my main stance would be to try to short as many things as possible. but, OTOOH, i would think a sufficiently severe pandemic would basically bring an end to social systems as we know them, including financial markets. so financial assets (short or long) could go "poof!" in that case, i'd want real assets which would be valuable in a Medieval world. i will need to consult my D&D manual to see whether i'd be better off with a mace or a halberd -g-. there's an interesting passage on the Black Death in Peter L. Bernstein's book, The Power of Gold: As the masses of human bodies disappeared, their physical possessions and monetary wealth remained behind. This grisly process left most Europeans far richer than they had been before tragedy struck. To turn a phrase, as the poor got fewer, the rest got richer... Many people died without the opportunity to write wills, leaving their wealth with no readily identifiable ownership. This led to a great demand for lawyers... In addition, as the supply of labor had shrunk dramatically, a scarcity of labor joined with the plethora of money to produce a sharp rise in wages and the incomes of working people. Contrary to what one would expect under the circumstances, with so many workers leaving the farms to enjoy the temptations of the city, the price of food was remarkably stable. The loss in populations was so enormous that it had an even greater impact on the demand for food than the reduced supply of food... In the uncertain and turbulent environment, the incentive to save was minimal while the incentive to spend was irresistible.