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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: stock joker who wrote (38975)	11/6/2007 8:33:53 AM
From: TheSlowLane	Read Replies (1) \| Respond to of 39344

My understanding is that gold has historically held its value relatively better than other asset classes during deflationary periods.

To: stock joker who wrote (38975)	11/6/2007 2:02:56 PM
From: LLCF	Respond to of 39344

<In our current insecure USD environment, would gold hold its value under recessive deflationary pressure?> "deflation" is relative... you can have high unemployment, lousy corporate profits, and crashing values in certain areas if there is forced liquidation or default, and runaway inflation at the same time... ala Germany in the 20's. Some argue that this is wildly bullish for stocks, and on the face of it that seems right, but I think one missing piece is the risk premia which is skyrocketing, deeply lowering equity values ESPECIALLY IN THIS HIGHLY LEVERAGED ECONOMY. My understanding is that balance sheets are also slanted towards short borrowing as well, but I could be wrong about that. I would expect stocks to go nowhere special and 'Devalue' lower RELATIVE to other assets, whether the nominal S&P actually rallys won't be that important... DAK