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

To: ild who wrote (23998)	1/4/2005 9:12:09 AM
From: yard_man	Respond to of 110194

seems like Paul is loosening up and really letting them have it these days <g>

To: ild who wrote (23998)	1/4/2005 10:55:09 AM
From: Knighty Tin	Respond to of 110194

Ild, that was a wonderful article. Laffer is a joke and always has been, but most real economists are afraid to say so because the nutburgers go for the jugular. USC deserves to win the National Football Championship for a second year in a row simply because they had the courage to fire the goof at the height of his popularity. I know, one thing has nothing to do with another, but I am allowed to not be able to connect the dots sometimes, just like the surprise side economic monkeys. <G>

To: ild who wrote (23998)	1/4/2005 11:31:58 AM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Tue Jan 04 2005 10:49 trotsky (HoldGold, 8:34) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved well it's true - gold is a great wealth preserver during deflations. offers better real returns than during inflationary eras actually. but: "we will clearly and concisely explain why Prechter's argument is flawed and why gold and silver should indeed be big winners in any upcoming deflation." well, where IS the 'clear and concise' explanation? the article doesn't provide us with one. instead it keeps asserting something without offering a shred of evidence. note that Prechter distinguishes himself by offering a very coherent narrative buttressed with reams of supporting evidence. 'gold and silver will...' - that's a pipe dream. gold, yes, but silver? if Prechter's deflationary depression becomes a reality, industrial demand for silver will collapse - and with it, the silver price. gold will be supported by its safe haven status and its role as a money that can't be subjected to default. silver does retain SOME monetary characteristics, but not to the extent that its price could withstand a large decline in industrial demand. otoh, a minimum of two thirds, and probably more, of the all the gold ever mined is held on account of its monetary role ( 1 third in official reserves, the remainder in private hands ) . note also: in a deflationary era, gold stocks are a better investment than gold bullion ( putting aside for a moment the 'last resort insurance' aspect of bullion ) . this is because their product will at least hold its nominal value, or even experience a slight increase in it ( amounting to an appreciable gain in real value ) , but their input costs will decline. Homestake Mining's performance between 1930 - 35 is a good example for this - with the nominal gold price fixed, the stock went from $70 to $550, while paying out enormous ( by today's standards ) amounts in dividends. its costs of production fell throughout the period.

To: ild who wrote (23998)	1/4/2005 11:34:35 AM
From: Gemlaoshi	Read Replies (1) \| Respond to of 110194

ild, Great article from Kasriel. I thought his mention of the Arthur Burns Fed was interesting. Those of you who were around economics in the early 1970s may remember the argument: "the Germans and Japanese will continue to buy our T-Bonds and never break the Bretton Woods fixed exchange rates because they owe us their very security." Of course as we continued our profligate spending on Vietnam and Great Society programs, the pain eventually became too great, and first Germany, then Japan floated their exchange rates and the game was over. It took ten more years, Paul Volker, and much pain to finally recover from such nonsense. I get a sense of dejavu whenever I hear the argument that the Japanese and Chinese CBs must continue to buy our treasury securities because they have no other choice than to support their export industries. It is a fool's game that at some point must end in painful readjustments. The only remaining questions are who pulls the plug, and when. Dave