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

To: diddlysquatz who wrote (90663)	11/22/2008 1:30:58 AM
From: mishedlo	1 Recommendation Read Replies (1) \| Respond to of 116555

gold is money it will be hoarded Industrial and jewelry use of gold is about 3% or so. Only other use is money Mish

To: diddlysquatz who wrote (90663)	11/22/2008 7:36:39 PM
From: Proud Deplorable	Read Replies (1) \| Respond to of 116555

"Mish, give your basic thoughts as to why gold would do well in a deflationary environment. I would think that hard assets would do poorly in deflation." We have rising prices in retail gold and silver because of no supply so we have price inflation in the PMs because people know that we do not have monetary deflation but price inflation in consumer products that are a necessity and price reductions in non essential items and that's not because of lower producer prices whatsoever (these stats are LIES like everything else that comes out of Washington these days) but solely because of fear to buy because people see the economy slowing and housing prices crashing and they have less to spend and worry about their jobs. This isn't deflation. Example if builders can't make money they don't build and because of fear they try to clear their inventory to get anything they can out before it gets worse. This isn't deflation. Materials haven't come down in price nor will they. Greed dictates that people will go out of business before they decide to continue to lose money if they drop prices. Another example River Rock Casino just announced they are down 55% revenues in the 3rdQ and I notice that they are not dropping prices at all (meaning loosening up the slot paybacks) but rather are actually raising prices by tightening the percentages. This is squeezing the few players that are left but those folks won't put up with that too much longer as they read the papers too and see whats happening and don't go in the casinos as much as they did a few months ago. But in no way will they try to entice players in with better returns (maybe room discounts but this is a small % of their gross receipts anyway) because this would mean bankruptcy sooner than later so they are essentially stealing what they can until the party stops completely. Businesses that drop retail prices are now in big trouble, heck they are in trouble either way.