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To: Elizabeth Andrews who wrote (11723)4/11/2004 2:30:17 PM
From: eddieww
   of 110048
 
Elizabeth, how would you feel about Chinese gunboats patrolling the Mississippi up into Ohio and the Red Army controlling Washington DC and NYC? How would it be if they, or anyone else, called all the shots here? The British, along with the US, Germany, and Japan did so for a hundred years and more until after WWII. The problem with us americans is that we have a very short cultural memory and are primarily motivated by short-term economic considerations. The mistake we often make is that other peoples don't suffer from the same historical myopia. I assure you that Al Queda views the current situation, including the establishment of Israel and all western interference and invasions as simply a continuation of the Crusades.

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To: jrhana who wrote (11711)4/11/2004 2:40:20 PM
From: Little Joe
   of 110048
 
"We can do it"

You are right. I subscribe to a few services, but in the end I find the help from the people on the SI boards to be the most useful.


Little joe

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To: Square_Dealings who wrote (11712)4/11/2004 2:41:29 PM
From: Little Joe
   of 110048
 
I would say that chart is neutral until a new high occurs or the low point of the M formation is broken.

Little joe

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To: studdog who wrote (11717)4/11/2004 2:43:00 PM
From: Little Joe
   of 110048
 
For clarification, I didn't say it was going to 20, only that if it did I would have to rethink my position.

Little joe

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To: Elizabeth Andrews who wrote (11723)4/11/2004 3:23:48 PM
From: bruiser98
   of 110048
 
Google on "Opium Wars"
An example:
thebirdman.org

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To: jrhana who wrote (11694)4/11/2004 3:37:44 PM
From: Carlos Blanco
   of 110048
 
Then we will see the coming of Son of Volcker. I hope I have enough sense to sell my miners when he appears on the horizon

something to bear in mind: although stopping inflation in the 70s is usually credited to volcker's raising of interest rates, it will not be that simple this time around. more damage has been done and the situation is much worse.

there are two factors which can create rising prices (i.e. a manifestation of inflation and loss of purchasing power). the obvious one is an ongoing increase in the number of dollars--this is the one factor that the fed can somewhat control via rates and policies. the other is a loss of confidence in the currency and its issuer which reduces its worldwide demand--this can be independent of liquidity or interest rates, and would especially affect the prices of imported goods (e.g. oil). you could have a short-term static or declining monetary base with high interest rates, but your money could lose purchasing power vs. other currencies or imported commodities because demand for your money inside (and especially outside) your contry is declining. in the extreme but not impossible case (e.g. argentina 2001) the demand can be 0% with interest rates at infinity because the probability of future default is 99.9%.

interest rate policy or the fed will not by themselves fix a chronic loss of confidence or problems whose roots are political and where the damage has already been done (as is the case today in the US, in my opinion). you could find yourself trading in your miners for 20% treasuries only to be wiped out when rates subsequently rise to 50%.

the fact that yields stopped at 20% in the 70s is not a guarantee that this time they won't go higher if a deep enough dollar confidence crisis takes hold. there are several very plausible scenarios for the next decade where interest rates and the fed become largely irrelevant in terms of encouraging a desire to hold dollars:

*a shift out of dollars to gold or other currencies for transactions and bank reserves
*a perception that fiat money, and/or the government, and/or the fed, and/or the political system have failed
*a perception that politicians will never reduce their spending and the budget will keep increasing forever, inevitably leading to inflations or defaults
*ongoning military campaigns that impact the budget
*security measures that negatively affect property rights and the safety of US investments
*realization that future commitments (e.g. social security) far exceed what can be collected via taxes
*social/political unrest
*and so on...

this is kind of a long-winded post, so i think i can summarize its practical aspect like this: i would not let go of gold investments until there is both political and monetary evidence that the real problems will be solved. the appointment of a volcker-like figure would only be half of the equation.

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To: Little Joe who wrote (11728)4/11/2004 3:38:23 PM
From: Square_Dealings
   of 110048
 
It looks like the trend is up, not down.


M

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To: Square_Dealings who wrote (11732)4/11/2004 3:54:49 PM
From: Little Joe
   of 110048
 
Without a doubt.

Little joe

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To: Steve Lokness who wrote (11716)4/11/2004 4:54:00 PM
From: marginmike
   of 110048
 
dont disagree, however I think if China made a move here it would ultimatly be advantages to America, as people would start to realize where the next enemy really is.

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To: mishedlo who wrote (11611)4/11/2004 6:34:16 PM
From: Lao Ou
   of 110048
 
Impressive guess.

See my previous post.

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