James Wood

Deflationary Depression: The Simple Explanation

I appreciate your nice comments on prior articles and am sorry that this one is confusing.

Some summary comments may help.
1) We are at the end a of major economic expansion having lasted decades. Stimulus money will not fix the problem at this time and a lot of stimulus money will only make the final resolution more difficult.
2) Thus we either face hyperinflation which is totally destructive or we face a major depression which brings value and other economic indices back to a norm. Hyperinflation does all the same damage as as deflationary recession, plus it wipes all all creditors (read all people who have money and monetary investments) which makes it worse than the depression alone.
3) We expect the US government will ultimately move towards raising interest rates and other actions which avoid a wipe out hyperinflation. When they do that, it will be impossible to hold back the depression which will still cause immeasurable harm to many people, particularly those who are heavily indebted.
4) Thus, the expectation for a deflationary depression. It is not the case that the dollar will be king, but it is the case that most other investment classes will, in relative terms, look worse than the dollar. But in this depression, the only dollar that counts is one that you can collect. Banks will be going broke and one has to be very careful that your investments are realizable.


On Dec 07 08:33 AM 5142152-337 wrote:

> I looked forward to reading this article, as the author ALWAYS has
> solid information to provide.
>
>
> I am stymied by what I have read. This article confuses me....besides
> being easily confused, am I to glean from this article that gold,
> silver, and othe PMs are in trouble value-wise, and the dollar is
> going to be king?
>
> I'm going to vomit.

How Ken Lewis Has Failed the Test of Good Leadership

The three people commenting on this article refer to the issue if the government forced B of A to buy Merrill "for the good of the country". Once Mr. Lewis discovered what he had got his bank into, he wanted out and at that time the government did pressure him to go through with the deal. However, the initial decision to buy both Country Wide and Merrill were decisions taken by Mr. Lewis without any pressure from the government. The enormous loss suffered by the shareholders of B of A would have been much less if neither of these voluntary decisions were taken by Mr. Lewis.

Recent Policy Decisions and a Greater Depression

Thank for a most provocative article. A discussion of economics can not be labeled "conservative" ( or liberal) as one of the people did commenting on your article. You make a most interesting projection of where the economy will go based on Obama's economic policies.

My question for you is whether your are a student of Elliot Wave Theory? Your projections coincide exactly with what Elliot Wave Theory (particularity as represented by people like Bob Prechter). It is fascinating to see technical projections as those presented by Bob Prechter and fundamental economic analysis as presented by you which not only match in directionality and in timing for changes of direction of the market.