2bz

Deflation Changes the Rules

Chris B wrote: "Perhaps it is more likely we will have 70's style stagflation."

I think we already had some of this and perhaps we will have some more provided that the government succeeds in stabilizing the economy (I'm in this camp). If it doesn't I think that deflationary recession is in the cards. I don't feel that we're in for a traditional inflationary scenario.

Deflation Changes the Rules

CLH wrote: "most people still think that gold is going up when the dollar is going up. Not possible."

It is possible, when there is a lot of turmoil (political, economic, etc.) outside the U.S. relative the U.S. itself both gold and U.S. currency can appreciate. Of course, depending on the relative demand and supply of each their relative prices will fluctuate with respect to each other.

Deflation Changes the Rules

Tom Evslin wrote: "You can buy more gold with $1000 (US) cash today than when gold was at $1000; that's why cash is king."

"King is dead, all hail the king." The problems with kings is that they come and go. So even if the Fed IOUs are the king at the moment, gold may soon be the our king again.