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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: SouthFloridaGuy who wrote (89102)	10/24/2008 5:02:48 PM
From: benwood	4 Recommendations Read Replies (2) \| Respond to of 116555

My father-in-law told me a couple days his 401k was down about 40%, and he's holding tight. "What else can I do?" he wondered. I doubt he'll live to see his valuations as high as they were this summer, excepting hyperinflation of course, when they may reach that nominal level but will buy squat. And chances are that by next spring, he'll be down another 25%. Marc Faber made the comment earlier this week that there are many examples of indicies making highs, retreating, and never surpassing the previous high. Japan should give everyone pause -- down 80% twenty-eight years later. That's freakin' amazing. And if push comes to shove here in the US, we may see private pensions looted by the gov't as in Argentina, along with currency controls, frozen bank accounts, devaluations, etc. I believe if the deficit rate has not lowered by at least 50% by next summer, near term control over the situation will be lost. The real deficit running rate is now 1.4 trillion per year. Lots of things could create a need for gold, as it will be the only way to get through the black hole collapse and new currency rebirth. Gold will pass through and roughly maintain it's purchasing power. Paper money will be worth less than toilet paper. Not if, but when. I'd prefer at least ten years out, but may not get that luxury.

To: SouthFloridaGuy who wrote (89102)	10/25/2008 2:49:22 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 116555

There's significant differences between the situation in the nations you list below and the US. = = = Icelanders, Pakistanis, Ukrainians, Koreans, ...they NEED gold, do they not? = = = These nations have high levels of debt, and their debt is priced in currencies other than their own. When the value of their currency declines, they are in a catastrophe just like the Asia Crisis. The US may have high levels of debt, but America's debt is priced in US Dollars. The value of the debt rises and falls with the value of the US Dollar. More importantly, 2/3 of the US debt is private - a significant portion of this private US Dollar debt is being, and will be, liquidated in bankruptcy and foreclosure. This may result in lenders charging much higher interest rates. As a person with US Dollars, this sounds good! I'd love to see my US Dollars earn 9% interest than 4%. If you're short the American Dollar, because you're a debtor, you're going to be as happy as a bastard on Father's Day. .