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To: Crimson Ghost who wrote (13088)	6/13/1998 4:31:00 PM
From: Amelia Carhartt	Read Replies (1) \| Respond to of 116791

Thanks George: I agree.

To: Crimson Ghost who wrote (13088)	6/13/1998 5:33:00 PM
From: bobby beara	Read Replies (2) \| Respond to of 116791

George, major sentiment indicator: Todays front page headline in the LA Times Recession jolts Japan, Batters World Markets. When it hits the front page it's OVER. BWDIK, bb

To: Crimson Ghost who wrote (13088)	6/13/1998 8:22:00 PM
From: Investor-ex!	Read Replies (3) \| Respond to of 116791

George, IMO, the issue of "preventing" a global depression is moot. With the dislocations caused by the dramatic collapse of many commodities in dollar terms, a global depression has already started. We are seeing the effects of global deflation everywhere. The build-out of excess global capacity via unserviceable debt levels in many industries and in many countries during this expansion was impressive. If current pricing cannot support previous levels of production profitably, those levels of production will be reduced. Plants, factories, mines, wells, fields, and forests are being idled at an accelerating rate. Debt burdens are becoming untenable and defaults are increasing. By the time this is apparent to the average bureaucrat, the fat lady will be in the middle of her second aria in the third act. Then the issue is whether the longer-term deflationary effects can be mitigated to an appreciable extent. The standard remedy is reflation to counter the worst effects of entrenched deflation. Possible tools to this end would include: unilateral repudiation of debt (inflationary), reasonably low interest rates, but not so low that the banks can't make any money, (inflationary, but existing debt loads and collapsing prices would preclude the need for fresh borrowings), restructuring of current debt at better terms, a la IMF (inflationary), increased public-works spending (inflationary), increases in money supply (inflationary), government price support for all manner of commodities (inflationary), and increased social spending (inflationary). Gold, in dollar terms, will rise as the items in this list begin to be earnestly implemented in the US. In a global sense, we are near or at an inflection point. The US inflection point will follow with a bit of a lag, and will be precipitated by a crumbling of profitability of domestic capacity. Gold will rise in anticipation of these events. The other commodities will follow upward as their industrial demand/supply situations return to balance.