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Robin,
Re your comment below - would you mind providing some
historical date ranges for deflation in USA?
The conventional wisdom is that deflation is good
for Bonds because of the downward pressure on interest rates from the
need to reflate one's way out of the spiral, but your statements tell me that
gold competes as an investment choice, in constant currency terms. I would like
to verify that.
Thanks
Gitanshu
><FONT face=Arial
color=#0000ff>I have been in the business for 26 yrs which I believe qualifies
me as an oldtimer. I hope I have learned a few things over the years. One thing
I have learned relates to your question on Gold and can it go up in deflation.
The answer is YES. Gold does not go up BECAUSE of inflation. Gold goes up
because of a LACK OF FAITH OR CONFIDENCE in the currency. This lack of
faith can be expressed by either inflation or deflation. In an expansion of the
economy the lack of faith is expressed in inflation. In a declining economy it
is expressed by holding back, savings, etc, thus causing deflation. In extreme
cases, like at the end of a Super Cycle or Grand Super Cycle it can cause
Gold to go up even more than in inflationary times, because of the concern for
the solvency of nations, ie Japan today. We are not at that point yet, but
the charts will tell us when we reach it.Hope this
helps.
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<FONT face=Arial color=#0000ff
size=2>Robin
<FONT face=Arial color=#0000ff
size=2>
<FONT face=Tahoma
size=2>-----Original Message-----From: Don Ewers
[mailto:dbewers@xxxxxxxxxxxxx]Sent: Wednesday, March 14, 2001
11:18 AMTo: realtraders@xxxxxxxxxxxxxxxSubject: Re:
[RT] Is the end near - Not for GOLDNo I missed the
links (up late doing Sub-S taxes due March 15th), and youare correct
gold stocks are a better choice if so inclined.Also the parallel to
the NASDAQ is humm kind of ok but not the same in manyways. Many of us
saw the flaw there and have been and continue to be incash. My bond
partner has been warning me about deflation for some time andhas won me
over, so I am just not a gold fan in this environment. But if itgoes up
and you and others do well its OK with me.As far as Yardini is
concerned, I may be wrong but he came out on Friday(CNBC) and said he is
now worried about deflation vs. inflation his previousfear so . . . I
don't know. Can gold go up in a deflationary environment? Iguess so if
there is a financial panic at the same time?Attached are the AGET
charts, daily is bullish, weekly no clear picture.Good luck on your
trade.don ewersTo
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