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The first would
occur only if actions to stop the second one fail.
<FONT color=#0000ff
size=2>
Tell-tale signs
of the second:
1) steepening
yield curve
2) widening
corporate vs. treasury bond spread
3) CRB index
declining
4) real estate
prices stall, then reverse
5) falling equity
prices
6) increased
bankruptcy levels
<BLOCKQUOTE
style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #0000ff 2px solid">
<FONT face=Tahoma
size=2>-----Original Message-----From: Charles Meyer
[mailto:chaze@xxxxxxxx]Sent: Monday, August 19, 2002 1:43
PMTo: realtraders@xxxxxxxxxxxxxxxSubject: Re: [RT] GEN:
DEFLATION AND GOLD....
Simms-
You wrote that: "once that ball
gets rolling, the government has no choice except to pull an "Argentina"
and massively reflate...if they can do so in time. If they can't, wham,
depression occurs..."
Is the scenerio then EITHER inflationary
depression OR deflationary depression;
assuming things got out of hand?
chas
<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
M.
Simms
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Monday, August 19, 2002 12:27
PM
Subject: RE: [RT] GEN: DEFLATION AND
GOLD....
DEPRESSION
and DEFLATION not EXACTLY the same......
<FONT color=#0000ff
size=2>
yes, in a
depression, real assets worth nothing, and the US dollar worth little, so
gold shines....can't be printed, can't be forged.....
BUT With a
slower evolving deflationary scenario, all assets groups
decline......pricing power is gone.
This is why
everyone is watching the housing market so
carefully.....
as once THAT
market begins to decline, then we are really in trouble and a depression
becomes likely since mortgage holders (banks, etc) begin to foreclose on
properties whose value is less than the principal on the mortgage
due.
Once that
ball gets rolling, the government has no choice except to pull an
"Argentina" and massively reflate.....if they can do so in
time.
If they
can't, wham, depression occurs....
if they do
catch it in time, then massive inflation results with mortgage holders and
other creditors, the big losers.
<BLOCKQUOTE
style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #0000ff 2px solid">
<FONT face=Tahoma
size=2>-----Original Message-----From: Charles Meyer
[mailto:chaze@xxxxxxxx]Sent: Monday, August 19, 2002 11:39
AMTo: REAL TRADERSSubject: [RT] GEN: DEFLATION AND
GOLD....
Group-
Excerpt below from interview which references price of HM during the
great depression. I wanted to know Pretcher's logic for expecting
the opposite in the event of a deflation this time around.
chas
==========================================================
TAYLOR: Well, I have had some experience in analyzing gold
shares in all sorts of markets. Homestake Mining shared with me their
daily share prices dating all the way back to 1888 through 1998. During
the depression, Homestake Shares appreciated very greatly despite the fact
that we experienced deflation rather than inflation.
BATRA: Did the price of Homestake rise right from the beginning
or...
TAYLOR: No, actually Homestake's share price initially fell too
from $83.50 just before the crash to $65 about two weeks after the crash.
So perhaps the law of substitution did initially apply. But from November
15th and thereafter, Homestake's shares rose dramatically, to a high of
over $500 by 1936. And during 1932, when the DJIA had lost 90%,
Homestake's shares had reached $162. So investors who diversified their
portfolios with a little Homestake were able to travel through the Great
Depression relatively unscathed, while those who owned only the Dow Jones
Industrials, were devastated.
BATRA: Ok, what I am saying is that timing
is important. Gold stocks are also going to do very well. <FONT
color=#990000>However, at this stage, my advice is to start preparing
yourself by buying gold bullion. Then begin buying gold shares the
moment there is a whiff of inflation or when the market begins to favor
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