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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: gumnam who wrote (12166)	12/5/2006 1:47:01 AM
From: energyplay	Read Replies (2) \| Respond to of 218085

Unless the deflation / inflation situation gets to an extreme, like Weimar Germany for inflation, or the US in the 1930s deflation, it is not the end of the world. The Weimar inflation was deliberately started to reduce the burden of war reparations on Germany. The US 1930s deflation was the result of some deliberate actions, the squeezing of some New York Banks and many rural banks, a long delayed action by the Federal reserve during the Presidential transistion of 1932-3, the uneccesary and far too long bank closure ordered by FDR, and other fruitcake notions of the "New Deal". They were some useful policies and infrastructure efforts, too. The recent Japan deflation has had some bad consequences. Students graduate with fewer work options, and a significant fraction of young people could not find work. There is also more of a homeless problem. But for 90% of the population, it was merely unplesant. Japan, of course, has massive savings, and great social cohesion. Argentina went through a slightly nastier economic crisis, with some riots and considerable unemployment. They are recovering pretty well now. Argentina has the great advantage of experience, having had 4 currency blow ups since the end of World War II. ******** We will need to stay nimble, and ready to move in new directions. Some of the Argentines left and found better opportunities elsewhere. Many Argentines have assets outside the country. The Argentine government did pressure banks with branches in Argentina to allow the government to steal dollar assets of depositors and replace them with peso worth about 1/3. A few of the Japanese students left for Europe and North America, and then found better jobs. Having some gold and silver in a convient form can be useful. Also we may need to have some foreign currency. Looking at the Weimar and Argentine experience, it might be useful to avoid visible and extreme political positions. Of course, Argentina had a military government first, and then had a currency crisis ;-)