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B4 The Bell Tuezelday October 19


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#31 orvack

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Posted 19 October 2004 - 09:37 AM

Prechter's latest. Excerpt.

Q: Can the Federal Reserve prevent deflation?

A: No. We have a huge bond market of $30 trillion, which is debt already created. If bond investors came to believe that the Fed would begin printing money and throwing it around, what would they do? They would sell every bond they have got, which would lead to a decrease in the supply of credit because bond prices would fall and interest rates would rise. So there arenít any alternatives to deflation.

Q: What will be the outcome of deflation?

A: The ultimate result is going to be a worldwide depression. There were deep depressions in the 1790s, the 1840s and the 1930s, and I think the next one is already underway. It started in 2001. Weíve had one or two every century, and we are headed into one now.

Q: Gold bugs say we are in an inflationary era and that this is backed by the rapid rise in the price of the yellow metal from $250 an ounce in 2001 to above $400 recently.

A: They didnít say it at the low in February 2001, when gold was a buy at $250. The fundamentals were all bearish then, and even gold mines were hedging for further decline, which never came. Fundamentalist arguments donít get you in at a bottom or out at a top. They often set traps so youíll do the wrong thing.

Q: But doesnít the gold rally predict inflation?

A: Think about this: Gold is trading exactly where it was in 1996 despite massive credit inflation over the past eight years. Why is that? I think the gold market understands the difference between credit inflation and currency inflation. A reversal in credit expansion . which is inevitable, will crush prices for everything, and the gold market knows it. The gold bugs. theory is that an increasing money, actually credit , supply should be bullish for gold and silver. But it hasnít been bullish for 24 years, so why is it bullish now? Look, I might be wrong on my current outlook for gold. In 1995, in At the Crest, I called for the bear market to end about New Yearís Day of 2001, and it ended that February. So Iím somewhat conflicted. But that doesnít mean that the bullís arguments are any good. We have heard them at every gold top since 1980 and opposite arguments at the lows. People have a psychological imperative to come up with reasons to be bullish at tops and bearish at bottoms. Market analysis is a subtle and difficult craft. You canít just look out your window and assume the obvious. Thatís not to say the obvious never happens, but when it does, itís luck.

Q: Many contrarian writers are at odds with your views on gold and deflation. How do you account for the discrepancy?

A: They believe that the 1970s will repeat. People in the early 1930s initially thought the .teens would repeat, but they didnít. Many commodities have collapsed 30%-50% this year. Does that sound like runaway inflation to you?

SouthChinaPost.com



#32 machinehead

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Posted 19 October 2004 - 09:45 AM

Ranger Rick pointed out that the Fed funds futures now show a 40% probability of a 2nd rate hike to 2.25% by the end of this year ... up from a 25% probability y'day.

Even the next Nov. 10th hike to 2.00% is going to sodomize the economy and stock market, I think.

Snarliing bearish ...
"GOLD -- it's not just for misers anymore."

"Dollahs -- fire-starters for the K-wave winter." - Drano

"Three humps and a dump." - anotherone, 21 SEP 2004

"No gold was harmed in the making of this movie." - Bizarro Greenspan

[i]"Da Track. Da place where Morons bet on Animals Controlled by Criminals."
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Posted 19 October 2004 - 09:49 AM

Here comes the PPT to rescue the housing sector:

http://139.142.147.2...refreshrate=180

#34 orvack

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Posted 19 October 2004 - 09:49 AM

The Matrix at work !

Dave Morgan's website suspended...

http://www.silver-investor.com

If somebody knows what info he had last night.

#35 Lock Limit Down

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Posted 19 October 2004 - 09:50 AM

Well look at that
HGX boosters ON
UB
Posted Image
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." --- Thomas Jefferson

#36 machinehead

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Posted 19 October 2004 - 09:53 AM

Prechter's latest. Excerpt.

Q: Can the Federal Reserve prevent deflation?

A: No. We have a huge bond market of $30 trillion, which is debt already created. If bond investors came to believe that the Fed would begin printing money and throwing it around, what would they do? They would sell every bond they have got, which would lead to a decrease in the supply of credit because bond prices would fall and interest rates would rise. So there arenít any alternatives to deflation.

* sigh *

It's remarks like these which remind me that Bob Prechter graduated from Yale in Psychology ... not Economics, or even a useful scientific field. :lol:

Credit has a supply-demand curve. If "interest rates rise," more supply of credit will be forthcoming because the yield is more attractive.

Nothing about that process implies a deflation. Only widespread defaults, uncountered by gov't bailouts, would induce deflation.

Bob Prechter's insights into mass psychology are usually worthwhile. But his persistent refusal to educate himself about the funny-mentals of finance handicaps his effectiveness as an anal cyst.
"GOLD -- it's not just for misers anymore."

"Dollahs -- fire-starters for the K-wave winter." - Drano

"Three humps and a dump." - anotherone, 21 SEP 2004

"No gold was harmed in the making of this movie." - Bizarro Greenspan

[i]"Da Track. Da place where Morons bet on Animals Controlled by Criminals."
- our jickiss

#37 Lock Limit Down

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Posted 19 October 2004 - 09:53 AM

Short the RUT 576.50
Stops tight
Posted Image
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." --- Thomas Jefferson

#38 brian4

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Posted 19 October 2004 - 09:58 AM

My feeds went out 2 minutes after the market opened-anyone else get hit?? they are still not back up! ;)

#39 soup

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Posted 19 October 2004 - 09:58 AM

There are so many freaking disconnects in this pos they call a mkt. Look at cdwc and ibm? ANd hello, the homebuilders? WTF have they not been cut in half?
""Pretty bubbleheads preen daily on our financial networks, playing the shill to Wall Street and Washington in order to lure unsuspecting Americans into buying insanely overvalued stocks. The great market exchanges, once prudent arenas of investment where the engine of capitalism traded value for value, have become sham casinos staggering under decades of massive Fed created debt and lurching into oblivion on the greater fool theory. Yet our high level bureaucrats, led by Alan Greenspan, exhort all Americans to consume still more of their seed corn and seek still more fools." N. Hultberg

#40 Calculus

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Posted 19 October 2004 - 10:01 AM

When people can't get enough of tv shows like House Swap and The Biggest Loser, just when their country's fabric is going down the drain, you know it's all over.

When the Daily Show is the best news show you can find...

When over 40% of Americans believe Saddam PERSONALLY planned 9/11...



:cry:

Sounds like you've got a big epidemic of CHAVS in the US.

Chav is the new word in the UK to describe the majority of the population that;

drools over celebrities
worships designer clothes (especially where the Label is displayed prominently) have NO clue about anything that's going on in the world
dream of being famous (a la Big Brother)
drive vulgar cars
call their children stupid names like Kylie, Tiffany etc
live for TV programs like Jerry Springer, Geraldo or Dangerous TV stunts
wear a lot of flashy jewellery
view the latest mobile phones as status symbols etc etc

Chavs are ruining the UK and it's all so sad.

Of course Govt's love it because it dumms down the population so much that they (govt) pretty much get a free pass to do anything because a) nobody notices (too busy debating J-Lo's new hairstyle etc) and B) wouldn't understand what's going on even they did notice what's going on.

Chavscum.co.uk

#41 GregFokker

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Posted 19 October 2004 - 10:01 AM

My feeds went out 2 minutes after the market opened-anyone else get hit?? they are still not back up! ;)

IB east coast server running smooth

...A declining spenglerian carnival of Colossaalism united with Inflation where the numbers one through 10 are forever banished as worthless arithmetical detritus from a bygone age... - Beardrech

Naturally we believe the govt numbers... and Boobus Americanus sleepwalks off the edge of the energy-crisis cliff clutching his shares of "Crisco", Yoohoo and GooGah munching on his Yum Yums and Ho Hos. Future historians will have a hell of a time figuring out what the hell Americanus neanderthalus was thinking and exactly what brought on his sudden demise... - Henny Penny

Well, good night everyone. I gotta go lube up for tomorrow's regular end-of-week Gold Slapdown and Stock Index Bear Punishment Rally Weekend Greenprint. ...Probably another Shock-and-Awe Gap-Up-Open and Wire-to-Wire Meltup Runaway Bull Charge Mo-Mo Spike to Fresh New All-Time Lifetime Highs, culminating in a 4:15 yelping scalded dog runoff with panic short-covering and legal not-held bad double fills due to fast market conditions, plus quote system freeze-ups and trading platform lock-outs along the way. *yawn* typical gov't Friday. - Shorty


#42 purdymouth

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Posted 19 October 2004 - 10:02 AM

up up up*



Posted Image







*free insights

#43 Lock Limit Down

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Posted 19 October 2004 - 10:04 AM

Greenscum expressing "some" concern about consumer debt levels
Revelations from the chairman of the biggest debt bubble the planet has ever seen. Understatement rules as usual
Posted Image
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." --- Thomas Jefferson

#44 DrStool

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Posted 19 October 2004 - 10:07 AM

Greenie open mouth operations begin. Market rallies.

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#45 brian4

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Posted 19 October 2004 - 10:11 AM

Stopped out!





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