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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: valueminded who wrote (44682)	1/27/1999 12:06:00 PM
From: Knighty Tin	Respond to of 132070

Chris, I know the reason. I have my 10% cap app portfolio heavily in assets in case of inflation. But, it is only 10%, reflecting that I don't know whether we have an inflationary or deflationary depression ahead. I see evidence of both possibilities. See my note above about new puts buys. MB

To: valueminded who wrote (44682)	1/27/1999 12:12:00 PM
From: Mike M2	Respond to of 132070

Chris, I recommend that you read " The Great Reckoning" by James Davidson and Lord Rees Mogg chapter 11 & 12 . It will answer many questions. One quote that comes to mind is " deflation is delayed compensation for inflation" . I also recommend Gary Shilling's new book " Deflation" . I am not sure how exactly it all plays out but I do expect the deflationary forces to overwhelm the governments attempt to inflate away our problems and the inflationary pressure of a falling dollar. Davidson makes the case that the damage done to the bond market through monetary inflation is greater than the benefit derived from this action. To maintain its stimulative effect a credit bubble requires an ever increasing expansion of money and credit which is not sustainable. At some point the debtor must pay down the debt or default. Recession is a liquidation of inventory depression is a liquidation of debt and capacity. Mike