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To: Jack Clarke who wrote (4814)	12/27/1997 4:09:00 PM
From: Bobby Yellin	Read Replies (2) \| Respond to of 116762

Well Jack I am going to give you a glib answer rather than a glum one...When Warren Buffett sells his zero coupons and then announces it to the world, things will get bad. I did some research last week and looked up some old Rubin quotes. My eyes are weary and my brain is a little more befuddled than usual but I think Rubin calmed the market at different intervals and said that the Japanese weren't going to sell and if they did, there would be others to pick up the bonds. Even Peter Eliades is bullish on bonds. On tv he said there might be a spike up in rates, but then they would go down. Others have also reported that our rates are abnormally high compared to history. (talking to an artist friend of mine who could care less about the economy but when I asked her if she noticed inflation, she mentioned seeing Sixty Minutes a while back when Andy Rooney mentioned that even toilet paper has gone up in price and they give you less in a roll.. but I don't think necessities count in inflation measurements. I would also love to see buying power of the dollar now compared to buying power of ten years ago. Also I read the fantastic overnight gains in the Korean market..the percents sound great..wonder what the percentages would sound like compared to the highs? Also wage increases..wonder what the percentages would sound like if they compared them to the purchasing power of ten years ago..would that bring smiles to people's faces? Just read that Iraq is reporting that they should start being able to sell oil..wonder if the powers that be are putting on hold his "bag of goodies" ready to be unleashed to insure that there will be no more oil shocks even if there are so many gas guzzlers,etc Why did Warren buy those goodies? Did he know that the Asian markets were going to collapse and people were going to look for a safe haven, ie. US treasuries? I just love reading in the papers how great the US economy is and that our employment numbers are lower than they have been in over 20 some odd years..Nobody has given a good explanation why XMAS sales have been mediocre in the past three years. I am glad we have freedom of the press..gee what would they say if we didn't :> What did you think of the Barron's article by Edwards? I thought he did a pretty good job of explaining how market doesn't care about lasting progress...just plays ps I keep reading how the US will give this amount of money for aid and that amount of money for aid and that they will cut back on bond issuances...can they just print money and print and print and print and not even have to raise it by issuing new bonds?

To: Jack Clarke who wrote (4814)	12/27/1997 7:07:00 PM
From: Gary H	Read Replies (2) \| Respond to of 116762

Jack, I'll throw in a couple of lines from the Great Reckoning under the chapter called "Deflation Ahead". "the key to understanding the dangers of deflation is to recognize that the process of deflation is less transparent than the process of inflation". From a number of sources the word has come out that we will be looking at a deflationary situation and this may be confirmed by a statement from the same book that says that poiticians prefer to find themselves in a deflation rather then an inflation. I can't remember the name of the Gentleman who did the study, but his results showed that Gold did better during a deflationary period. Problem: Timing! What's wrong with now? Any ideas or diagreements with this? Cheers,