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

To: mishedlo who wrote (63655)	6/14/2006 10:19:36 AM
From: UncleBigs	Read Replies (1) \| Respond to of 110194

mish, what evidence do you have that gold rises in deflation other than the 1930's? under a gold standard, a higher demand for cash meant a higher demand for gold. under a fiat deflation, I can't see how that results in higher demand for gold but lower demand for everything else. how did gold perform in yen terms during japan's deflation?

To: mishedlo who wrote (63655)	6/14/2006 11:36:38 AM
From: Mike Johnston	Respond to of 110194

I cannot understand why gold would rise during deflation, except in a situation of war or out of fear, in a financial panic-systemic collapse scenario. Also at a time of social unrest, confiscation or revolution, gold would be sought after as a way of getting wealth out of the country outside of banking system.

To: mishedlo who wrote (63655)	6/14/2006 11:46:09 AM
From: Mike Johnston	Respond to of 110194

I don't claim that gold and stock market will be tied, at this time it is a function of a flood of liquidity. However, going forward these are some of the things that might happen: - Fannie Mae or a high profile bank collapses - Economy goes into depression - House prices decline by 50% or more - Dollar collapses and then is replaced Under all of the above scenarios i can picture gold going north of $1000 while Sp500 drops below 1000.