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

To: Horgad who wrote (88465)11/5/2007 1:56:40 PM
From: GST  Read Replies (1) | Respond to of 110194
 
The dollar is going down in part because there is a credit contraction -- and the decline of the dollar is sending prices through the roof. Be very careful before you drink the coolaid with the word "deflation" on it -- be sure you understand that these guys are NOT talking about falling prices -- they are talking about a credit contraction. If prices are going up they wave this away as unrelated to inflation because it is not related to money supply -- this is not economic analysis, it is a cult.



To: Horgad who wrote (88465)11/5/2007 2:01:09 PM
From: KyrosL  Read Replies (2) | Respond to of 110194
 
The case for gold holding its own in a deflation is based on what gold did during the Great Depression. But at that time gold was money. It retained its value precisely because of its official money status.

I think that in a modern deflation gold will behave just like any other commodity, unless it becomes subject to some kind of irrational bubble.


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