Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Omnichrome who wrote (4749)	12/24/1997 1:07:00 PM
From: Terry Swift	Read Replies (2) \| Respond to of 116753

It is Kondratieff and you are correct about his theory of huge 60 year cycles in which economies move from inflationary/boom to deflationary/bust periods. I remember reading and hearing a lot about the Kondratieff cycle from goldbugs in the early '80's. According to its followers back then, the trough was supposed to occur in the late '80's due to the massive government and private debt which, theoretically, could never be repaid and; therefore, could only be dealt with via outright default or massive printing of fiat money by the Fed. The theory was that since outright default was political suicide, we would inevitably see massive money printing by the Fed leading to hyper-inflation and an astronomical gold price. Kondratieff's work involved following these cycles back for hundreds of years to prove that world economies did move from over-extended boom to greatly exacerbated bust cycles. Many followers of Kondratieff believe the US has only managed to delay the day of reckoning by exporting its inflation via the sale of US debt to foreign buyers and by maintaining a strong dollar via historically high real interest rates. Even at a 6% long bond, real interest rates are among the highest in the history of this country over such an extended period of time. If Kondratieff was right, we may be seeing the beginning of his bust cycle, wherein deflation and depression are the result of the collapse of the massive debt pyramid that has been built over the decades throughout the world, including the US. It will be very interesting to see the effects of the "Asian Contagion" on the US economy and fianancial institutions over the next 6 months. Terry