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Ender has a very
good point when he says, "large changes happen at a snail’s
pace". But once in a while throughout history, large changes happen
at what seems like lightning speed!
The thesis of this blog is that back in 1997 a man, who went by the name
ANOTHER, had the wisdom and such a high vantage point, the height at which
leaders view the scene, that he was able to see what was coming and share
that view with a few people. And sometimes, when you are really high in the
mountains, things are farther away than they appear.
On Wednesday, November 5, 1997, Another laid out a scenario which he saw
happening specifically within a 30 day time frame. Remember, at that time the
price of oil was his trigger. It may still be, but as I said in a previous
post, we are now awash with potential triggers.
Here's the quote:
At this moment in
time and space, the price of oil in US$ terms is about to roar! It will crush
the Pacific Rim and South America. It will drive the US$ sky high in terms of
other major currencies but the dollar will collapse in terms of gold! Short
term interest rates in the USA will be driven thru the floor much the way
they have been in Japan from the early 90s. This will be done to combat a
imploding equity market. Long government bonds will almost stop trading as
their yield soars from the oil price fears of "inflation"! Because
of todays "new digital paper markets" this entire act will be
played out in 30 days or less. Yes, you are right! During that time
we will have inflation and deflation. - ANOTHER
I think we may have finally arrived at the beginning of that 30 days.
That is a bold statement to make on the eve of an historic vote by Congress,
but I don't think it makes a bit of difference which way the vote goes. Sure
it makes a difference for the future of freedom and capitalism, but not for
the future of physical gold.
And on the subject of inflation and deflation, this is a short post I made on
another site explaining how inflation and deflation go hand in hand.
Just my two cents on Inflation/Deflation. If I buy a house on a street
with 5 houses for $100,000, then later someone buys a house for $200,000, all
of a sudden, all 5 houses are worth $200,000. My net worth went up $100,000.
The street's net worth went up $400,000. But 400,000 dollars were not
created. Asset inflation happened.
Asset deflation is happening now, which is the reverse effect. If I bought a
house for $500,000, and now someone sells for $250,000, then all the houses
on the street are now worth $250,000. So the net "loss" to the
street is $1.25 Million. That is deflation.
This is happening with all types of assets, things that were assumed to be
good investments. But as we bail them out, we take some of that phantom net
worth, like the $400,000 in the first paragraph, and make it real, spendable
cash.
That cash is no longer going to go into bad "assets" that were
previously thought to be good investments, it is going to go into real
things, like gas, oil, gold and milk. And because it is newly printed
spendable cash, it is going to bid against the previously existing spendable
cash. That bidding process will cause the cost of real things to go up. That
is inflation.
So we can have both asset deflation and real world inflation at the same
time. Necessities will cost more. Luxuries and Mortgage Backed Securities
will cost less.
FOFOA
FOFOA is A Tribute to the Thoughts of Another
and his Friend
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Also
by Fofoa
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