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

To: Mike Johnston who wrote (64214)	6/20/2006 3:19:00 PM
From: UncleBigs	Read Replies (1) \| Respond to of 110194

some of your mental exercise can't happen because the government has a printing press. there will be no default on u.s. government obligations. why would gold cost $8,000 per ounce if California real estate drops 90%? would you rather have 10 gold coins or a California house?

To: Mike Johnston who wrote (64214)	6/20/2006 3:43:18 PM
From: mishedlo	Read Replies (4) \| Respond to of 110194

some of those are IMO illogical. In a total collapse of currency I doubt asssets like stocks and houses and land would be off 90% Could it happen? I suppose but the odds are as close to zero as you can get. Individually some people did indeed predict that JDSU would fall back to $1 and Heinz debating Gilder at the tip top of the Naz bubble right here on SI did predict that Global Crossing would go under (bankrupt). Gilder thought he was nuts. And I bet that I am not bearish enough either because some things on your list could happen. In fact given time they could all happen except not at the same time IMO. In other words some now(within 3 years) and some 15 years from now. 1,2,and 3 seem possible enough even if unlikely for nearer term execution. but the more stuff you pile on especially when some of it goes the other way (a complete collapse of currency - ie hyperinflation would generally mean that prices of goods, land, and assets were rising). Looking at the list, you mainly seem to be describing the ultimate deflationary depression the world has ever seen except for the total collapse of currency. 1,2,3,4,7 seem to all tie in together and possibly even 5 and 6 but let me put a more realistic yet still unlikely set of numbers on those 1. California house prices down 75% from the peak. 2. 35% of outstanding mortgages in default. 3. 15 million foreclosures. 4. 18% unemployment rate. 7. DJIA dropping back to a level of around 3000. Mish

To: Mike Johnston who wrote (64214)	6/20/2006 3:52:19 PM
From: GraceZ	Read Replies (4) \| Respond to of 110194

The long run trend is for everything to get cheaper in real terms. In other words, over time it takes less of your time, energy and resources to provide the basic necessities of life: food and shelter. This trend is thousands of years old. The only place I can think of where it got interrupted in modern times at any scale was in those countries which conducted the grand experiment of Communism. JDSU reverting to where it did was a high probability event given the history of US publicly traded stocks and technology companies. All technology sits a top a very large mountain of failures. The low probability event is a Microsoft or an Intel. It's not lost value because incorporated in every success is the knowledge gained from the failures. Gold would be a poor hedge in a total economic collapse, guns and ammo would be a better currency. Gold is great if your specific country fails. In a global melt down there is no safe place to convert it to goods and you can't eat it. A low probability event would be that the US, learning from the failures of the Russian and Chinese experiments with collectivism and centralised control of the economy, decides to abandon it's movement towards socialism and Federal intervention into every day life. The elected then vote to shrink the Federal government by 90%, restoring the individual rights and freedoms as well as the personal property rights it has so grievously stripped away in the last forty years.