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Neil,
> are on a Starship into new and uncharted waters. We cannot backtest
> because no one has been here before.
This is not true. Just feed the data from the Nikkei since 1987 into
your system and you will be fine.
Gerrit
> What's this. A discussion using fundamental analysis.MMMMMMMMM.
> Isn't it interesting that in market volatility we look for reasons
> why rather than our system. I say let's back test it. Back test
> what? I don't know call Omega man have him back test it.There is the
> rub we have no circumstances that mirror what is going on today. We
> are on a Starship into new and uncharted waters. We cannot backtest
> because no one has been here before. -----Original Message-----
> From: Gonzo <gonzo@xxxxxx> To: omega-list@xxxxxxxxxx
> <omega-list@xxxxxxxxxx>; Kent Rollins <kentr@xxxxxxxxxxxxxx> Date:
> Tuesday, August 11, 1998 7:29 PM Subject: Re: DEFLATION MYTH
>
>
> >The idea is to back it with something of value that does not allow you to
> >print money out of thin air... Whether it be gold or something else
> valued.
> >
> >
> >-----Original Message-----
> >From: Kent Rollins <kentr@xxxxxxxxxxxxxx>
> >To: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
> >Date: Tuesday, August 11, 1998 7:07 PM
> >Subject: Re: DEFLATION MYTH
> >
> >
> >>Okay, but what about 30 years from now when gold will be a by-product of
> >our
> >>fusion reactors?
> >>
> >>Kent
> >>
> >>
> >>At 08:56 PM 8/11/98 -0400, you wrote:
> >>>Simple each serialized bill/digital credit is tracked with a certain
> >amount
> >>>of gold backing it. When you deposit the money in the bank they pay you
> a
> >>>certain amount to use it.
> >>>
> >>>If you are intrested in this subject you can study Austrian Economics or
> >>>check out the Von Mises Institute.
> >>>
> >>>Simple supply and demand.. If gold is scarce, your gold backed bills
> will
> >>>be able to buy many loaves of bread.
> >>>
> >>>It goes back to the first existance of money. They didn't want to drag
> >all
> >>>this gold around.
> >>>People appeared that were willing to store it for a fee and write a
> >receipt
> >>>for it. You could then trade the receipt (a paper note) for goods and
> >>>services. The person receiving the note knew that he could at any time
> go
> >>>and redeem it for gold at the storage facility. The fraud started coming
> >>>into the picture when they had thousands of notes out backed by gold in
> >the
> >>>storage faciltiy. Knowing that not all the people are going to redeem
> >their
> >>>notes, they started printing up more than one note for each unit of gold
> >in
> >>>storage (fraudulently).
> >>>
> >>>Worse case scenario -- A run on the banks occurs, this is fine as long
> as
> >>>the banks are held accountable to repay depositors.
> >>>
> >>>FDR relieved the banks of ever having to repay depositors (the so called
> >>>banking holiday). This was the worst thing he could do. In the free
> >market
> >>>he should have let the banks that were going fail do just that. And the
> >>>ones that made it financially by the the skin of their teeth or better
> >would
> >>>be the banks that would be the stronger and more fiscally sound.
> >>>
> >>>And for a side note.... The Roaring Twenties was built on a credit
> >bubble.
> >>>When you can borrow money cheaply people are willing to expand their
> >>>businesses (get loans for new equipment, buildings, employees ect.) This
> >>>creates a look of prosperity on the surface. New houses and pizza
> >>>franchises going up everywhere. But it is built on credit that must be
> >>>repaid. If there is a slump you can't make the payments etc...
> >>>
> >>>Under the gold standard there are not extreem fluctuations in business
> >>>cycles and interest rates..
> >>>
> >>>La Gonzo
> >>>
> >>>
> >>>-----Original Message-----
> >>>From: Kent Rollins <kentr@xxxxxxxxxxxxxx>
> >>>To: Gonzo <gonzo@xxxxxx>
> >>>Date: Tuesday, August 11, 1998 5:30 PM
> >>>Subject: Re: DEFLATION CRISIS... myth exposed <----Actually Stagflation.
> >>>
> >>>
> >>>>Is there enough gold in existence for us to back our money with it?
> What
> >>>>about all the currencies around the world? Also, if I deposit $100,000
> >in
> >>>>the bank and the bank lends it out for someone to pay a home builder,
> >does
> >>>>the reserve need $200,000 or $100,000 in gold to back it up?
> >>>>
> >>>>Kent
> >>>>
> >>>>
> >>>>At 10:59 AM 8/11/98 -0600, you wrote:
> >>>>>The answer is simple get away from fractional reserve banking and
> return
> >>>to
> >>>>>a full gold standard (not the brenton-woods semi gold standard). The
> >>>>>problem is that it is to late for the US because you can not run
> >deficits
> >>>on
> >>>>>a gold standard. They wanted powerful money overseas so they allowed
> >>>>>foreigners to exchange their money for gold bullion, but wanted
> >>>inflationary
> >>>>>money at home. This infationary money cheats the people. Why? because
> >>>when
> >>>>>you first print the money at the top it has a set value that is greater
> >>>than
> >>>>>when it trickels down through the economy (a lag time effect). Also
> >they
> >>>>>can take this money that they just printed and buy real assests such as
> >>>land
> >>>>>and buildings. This is why they wanted to dual standard money.
> >>>>>
> >>>>>Nixon took us off the Semi-gold standard (Brenton-Woods) because
> >>>foreigners
> >>>>>became scared about the US economy and decided to exchange their
> dollars
> >>>for
> >>>>>the gold. The government got worried when the gold reserves became
> low.
> >>>>>Why was the government worried? Because we were using a fractional
> >>>reserve
> >>>>>system (a fraction of the dollars out there have gold backing them).
> If
> >>>we
> >>>>>had money fully backed by gold whether paper, coin, or digital credit
> >you
> >>>>>would experience new parallels or prosperity.
> >>>>>
> >>>>>Why is this gold backed money better? When you print a bill backed by
> >>>gold
> >>>>>you have to spend time/energy to get the gold. This time/energy/gold
> >has
> >>>>>greater value. Slapping a bill on a legalized counterfeiting machine
> >does
> >>>>>not create value.
> >>>>>
> >>>>>
> >>>>>-----Original Message-----
> >>>>>From: Timothy Morge <tmorge@xxxxxxxxxxxxxxx>
> >>>>>To: bruceb@xxxxxxxxxxxxx <bruceb@xxxxxxxxxxxxx>
> >>>>>Cc: Omega List <omega-list@xxxxxxxxxx>
> >>>>>Date: Tuesday, August 11, 1998 9:43 AM
> >>>>>Subject: Re: DEFLATION CRISIS... myth exposed
> >>>>>
> >>>>>
> >>>>>>bruceb@xxxxxxxxxxxxx wrote:
> >>>>>>>Why, because of all the potential threats to the US economy, this is
> >by
> >>>>>far the easiest >problemto fix.
> >>>>>>
> >>>>>>> What got us into the deflationary cycle of the 1930's? The
> >government
> >>>>>>> contracted the money supply at the very time they should have been
> >>>>>expanding
> >>>>>>> it. What got us out of it? A massive expansion of the money supply
> >to
> >>>>>pay
> >>>>>>> for World War II (some things you learn by trial and error...).
> >>>>>>>
> >>>>>>> Bruce
> >>>>>>
> >>>>>>
> >>>>>>Bruce:
> >>>>>>
> >>>>>>Personally, I'm not particularly interested in forecasting where the
> >>>>>markets are
> >>>>>>going--I'll trade them if they go up or if they go down. And until
> now,
> >>>>>I've
> >>>>>>read your personal opinions of how the world works and found them
> >>>>>interesting. I
> >>>>>>don't agree with all of what you've written, but that's what makes the
> >>>>>world go
> >>>>>>round.
> >>>>>>
> >>>>>>Now, your statement about deflation being simple to end...I was
> trained
> >>>as
> >>>>>an
> >>>>>>economist at the University of Chicago. In fact, while there in their
> >>>joint
> >>>>>>degree program in the late 1970's, I paid for my schooling by doing
> >>>>>research for
> >>>>>>the BLS. In theory, deflation can indeed be cured simply by printing
> >lots
> >>>>>of
> >>>>>>extra money. But you speak about it as if the economy will react and
> >turn
> >>>>>on a
> >>>>>>dime. It isn't that simple and it doesn't work that way. No matter
> what
> >>>you
> >>>>>>read.
> >>>>>>
> >>>>>>I gave a speech at a dinner in Princeton, NJ about seven years ago,
> and
> >>>Dr
> >>>>>Paul
> >>>>>>Samuelson was also speaking. And during his speech, he described the
> >>>great
> >>>>>>difficulty they had trying to get the economy to respond to ANY type
> of
> >>>>>fiscal
> >>>>>>stimulus, as well as the printing of huge amounts of 'dollars.' His
> >>>>>statements
> >>>>>>boil down to one phrase: At some point, deflation is almost impossible
> >to
> >>>>>>turn--It's like pushing on a piece of limp string. The economy just
> >>>doesn't
> >>>>>>respond. He was on the shadow open market committee during the
> >1930's...
> >>>>>>
> >>>>>>I've had my stint as an economist and I'll leave that job to someone
> >>>else.
> >>>>>But I
> >>>>>>hope people that are reading your series take the time to think for
> >>>>>themselves.
> >>>>>>You've presented some interesting views, but unfortunately, you've
> >>>>>presented
> >>>>>>them as if they are fact and written in stone. They may be your views.
> >>>They
> >>>>>may
> >>>>>>be right or wrong. But in many of the things you have written about
> >here,
> >>>>>the
> >>>>>>way things unfold will not be dictated by anyone's opinion. And that's
> >>>why
> >>>>>there
> >>>>>>is a market place.
> >>>>>>
> >>>>>>Best,
> >>>>>>
> >>>>>>Tim Morge
> >>>>>>
> >>>>>
> >>>>>
> >>>>
> >>>
> >>>
> >>>
> >>
> >>
> >
>
Gerrit Jacobsen
http://www.tickscape.com
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