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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (66690)	10/1/2010 12:38:43 PM
From: Hawkmoon	2 Recommendations Read Replies (2) \| Respond to of 217918

there is no pragmatic constraint on how high gold can go, because, precisely, gold is assuredly useless and that is its charm. That's rather dysfunctional logic. In periods of deflation, asset prices decline relative to cash. I'm not sure the Fed can undertake sufficient QE to create major inflation without a political uproar from the electorate. However, they can attempt to maintain some form of status quo, preventing an all-out deflationary spiral and liquidity trap, where some assets decline while others hold level or actually appreciate. Again, this is going to take re-establishment of the demand curve. And how the government spends money will be critical. "Make work" stimulus is not the answer. Long-term investment in national infrastructure and R&D that yields productivity enhancements and technological advancement is the key, IMO. But again, as my previous link pointed out, a lot of this depends on straightening out the mortgage mess and I think we're a long way from accomplishing this. Until that happens the banks are going to be afraid to lend to small business and main street. And I think the legal issues with the MERS system are just getting started: bloomberg.com zerohedge.com And Europe is facing a similar situation, and the chances are that China is as well. We're going to need to go back to old rules where mortgage notes have to be carried on bank's books, and not securitized, IMO. Either that, or the laws are going to need to be dramatically changed. And that will create fundamental changes in the way consumers view buying a home as an investment. Btw, over the past 30 years, just how volatile has the price of gold actually been? Remember when it was $800/ounce in 1980? And then it went to just under $300 back in 1999? goldprice.org (last chart). That's a 28 year wait that gold investors in 1980 had to wait for until they were break even. Hawk