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Gold/Mining/Energy : Barrick Gold (ABX) -- Ignore unavailable to you. Want to Upgrade?

To: Kailash who wrote (991)	2/19/1999 5:04:00 PM
From: bill	Read Replies (1) \| Respond to of 3558

The problem with a deflationary economy is the built in rigidity of the economic system. An inflationary economy may be very destructive in the long run or if the inflation is very high; however, rounds of financing, increasing profits, wage increases, commodity increases can all be accomodated because of human psychology. Prices go up, wages go up, commodities go up, bankers can justify greater and greater loans, etc. There is little flexibility on the down side. Instead of general decreases spread out over everyone we get crashes as companies chop jobs, go bankrupt. There's never been a flexible downside mechanism. Wage and price controls have a poor record. There is no way of easing the deflationary costs across the whole system. I must admit I have a great nostalgia for the time that I believed a dollar was a dollar and would always be worth a dollar in purchasing power. Interestingly, as the economists know, a lot of items cost approximately the same as they did five decades ago. Thanks for the tip about the SA thread. If there is an industry shift as opposed to a company shift understanding that will do more for us than understanding what is happening with one company.