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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: 8bits who wrote (11203)	8/19/2008 2:10:37 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 50094

re:["Richard Russell now says deflation."] Imagine that? With Gold $240 off it's highs, with the HUI Gold Stock Index down -220 points, with the Baltic Dry Index down -30%... with the DOW down -3,000 points, with Oil, Natural Gas, Copper, Corn, Wheat, and virtually the entire commodity complex now down 30-40%, with housing and financial assets still collapsing... Russell NOW sees the forces of deflation. Whodathunkit?!? Funny how markets make opinions, and not vice versa? Here's Russell's comments... ============================================================= Richard Russell: "To give you a hint of what I think the combined markets are now telling us -- I believe we are on the eve of world deflation. I pulled out a headline from the August 5 Wall Street Journal headline -- "INFLATION PACE IS FASTEST IN 17 YEARS." Forget it, this is history -- this is not what's happening in the market. From what I see, the markets are telling us to prepare for hard times, and a global spate of the worst deflation to be seen in generations. This is why gold has been sinking, this is why stocks have been falling -- big money, sophisticated money, is cashing out, raising cash, preparing for world deflation. This is probably why Lowry's Selling Pressure stays at its high, smart money is selling into the stock market, day after day. They're raising cash in preparation for the hard times when deflation is in the saddle. Deflation is ushering in the new strong dollar. Big money sees deflation and the lower rates that go with deflation. Look, if you have five million dollars and you are only receiving 2% in interest on your money, that's only an income of hundred thousand dollars on your five million. Big money realizes that in a deflation you need a mountain of cash to keep up your lifestyle. What I see is a coming world deflation, and I believe that's the message the markets are sending. What's the best stance in a deflationary situation? Lots of cash, and safe, solid, investments. Two areas that fit that requirement -- US dollars and US Treasury paper. What happens to stocks during deflationary times? They're sold to raise cash. What happens to business in deflationary times? It's crushed by ever-lower prices. What happens to the average citizen who's loaded with debt during deflationary times? They're battered unmercifully, as income buys less and less and as debt crushes them. What happens to assets during deflationary times? They're worth less and less and their sale brings in fewer and fewer dollars. Isn't the price of gold and oil already telling us that? I just finished reading The New York Times, Los Angeles Times and Barron's and there isn't a hint of what I'm writing about above in any of these publications. Unfortunately, these coming deflationary times will come as a complete surprise to most people." ============================================================= The crossroads are nigh. And the choice is still all yours... What's it going to be? Pro, or Joe? Lead, or Follow? Anticipate, or React? Did anything Russell had to say, sound familiar? Confused by the whole inflation vs. deflation debate? You should be. Let the academics on Kudlow & Co. debate the semantics. Stop thinking inflation , or deflation - because we have both. Start thinking - expansion or contraction, and acceleration or de-acceleration? Is the Fed still cutting rates, and ramping money supply? Or, have they applied the brake pedals? Is bank credit expanding, or contracting? Is the velocity of money accelerating, or de-accelerating? Are global economies growing, or slowing? You might want to take another look at this chart, but this time, keep both your eyes and your mind open, because... "None are so blind, as those who will not see." Message 24766567 Because that chart, turned this one... Gold up strongly against all major currencies. Into this one... Gold down against all major currencies. Remember these? "You can lead a horse to water, but you can't make him drink." Mo later, S.O.T.B.