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

To: Peter Singleton who wrote (46874)	2/13/1999 11:12:00 AM
From: Bonnie Bear	Read Replies (1) \| Respond to of 132070

Peter: something to consider....the world is awash in bad debt..the big governments are awash in bad debts...the history of the United States and of world governments is to inflate their way out of the bad debts by printing money. Stocks and real estate can effectively "hold value" in a hyperinflation if they were grossly overpriced at the start of the hyperinflation, they can continue to go up as money is pumped into them..commodities and retail items can go down, as money is pumped into efficiencies in manufacturing. But the hyperinflation has the effect of reducing the bad debt, just like the guy who mortgaged his soul for the $20,000 house back in 1950 just keeps refinancing and pulling money out of it. In a real sense, our dollars have devalued 70% against S&P currency units since 1995..S&P currency is just as good as any other currency, it is liquid and can readily be exchanged for any world currency with an exchange rate of its own...the market does not have to go down, the other alternative is that everything else eventually inflates to meet it, probably in great tectonic upheavals that lift prices by 20-30% overnight, here and there. Derivatives were created around 1973, as best I can learn...and the extensive use of them in modern markets makes comparison with 1929 rather difficult. We have derivatives holding up indexes, or holding down indexes...the stocks in the indexes are immaterial at this point.