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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Ploni who wrote (10302)	6/19/1998 9:23:00 PM
From: Investor-ex!	Respond to of 18691

Charles, It sounds as though you are leaning toward believing that high inflation is more likely. I think the planet has had about enough deflation, for now. We're near 0% in the US (if you believe the stats) and Asia is running a depression. The question becomes what are the odds that the current trend is let to run its course vs. a forced turn-around. Inflation/deflation have a notable characteristic, a characteristic most present day stock investors can appreciate -- momentum. Once price inflation/deflation take hold and begin to run, it is VERY hard to stop, much less reverse. The stopping/reversing action is also usually pretty painful for large parts of the population, i.e., the medicine is frequently as bad as the malady. This additional pain factor causes delays in taking action to change direction, as it is hoped the malady will simply dissipate on its own. But it won't -- conditions just continue to worsen. I believe most of the Western governments would prefer inflation vs. global deflation entering into global depression. But can a reversal be engineered quickly enough? We've had declining prices on a global scale for much of this decade. This is the current price trend. That trend is now plainly causing problems and cannot continue. It must be halted. Note that the action to halt the trend will not stop there, as the actions needed to produce the halt are inflationary, and those actions will tend to produce a new, inflationary trend. The cycle begins again. So, yes, from a US perspective, I lean towards inflation, yet I wonder if a trend change is even recognized as being required. I'm quite ambivalent at this juncture. Things look perfect in the West and awful in the East. Until things look awful everywhere, I fear deflation will continue in Asia until the West starts getting pulled into the same deflationary vortex. The commodity markets always predict inflationary pressures, don't they? Well, they certainly can exhibit inflationary pressures. By the time they've begun to move up, the predicting phase is over. So you would position yourself with real estate now? Anything else interest you? Gold, guns and butter, beanie babies :-) ? As a hedge, I've started to dollar-cost average a portion of my assets into gold shares. They're incredibly beaten down, what with gold selling below production cost for most of them. Whatever happens, I think they'll do OK. Once oil looks to have bottomed, I will likely begin a long-term accumulation there as well.