http://www.dismal.com/thoughts/th_wb_072899.stm

"Commodities Fall Short

Analysis by Wes Basel

Written July 28, 1999

Whenever economists begin to avidly seek out signals of accelerating inflation, commodity prices are often the starting point. Commodity prices have also been often proposed as a target for setting monetary policy.

Do commodity prices form a valuable leading indicator of inflation and help in determining the appropriate monetary policy? No, not when there are ample supplies of those commodities as has been the case for much of the past twenty years. Moreover, as Federal Reserve Board Chairman Greenspan noted in today's Humphrey-Hawkins testimony, the economic import of energy and other commodity prices is far less today than it was as recently as 20 to 30 years ago.

To be an effective store of value and thus a good indicator of asset price inflation, a commodity market must be characterized by stable supply and demand conditions. Low volatility of demand over the short-term and moderate growth in supply productivity over the long-term is desirable. No significant commodity market has met these conditions over the past twenty years. Productivity of agricultural production has outpaced overall economic productivity for several decades, oil production technology has exploded since 1985 and mining technology marches steadily upward. Simultaneously, volatility of raw materials demand has substantially increased, as the globalization of manufacturing leads to a jump in the amplitude of global investment cycles.

Furthermore, to be an effective leading indicator of general inflation, raw materials must be a significant and stable contributor to the overall economy. With the continued rise in the productivity of extractive industries and robust growth in value-added activity, raw materials' importance to the economy has declined dramatically (Chart 1). Apart from the supply shocks of the mid-1970s, the contribution of raw materials has steadily fallen throughout the post-war period, and currently comprises less than 5% of the U.S. economy.

The result is a reduction in the correlation between commodity prices and general inflation, diminishing their usefulness as leading indicators. The last serious consideration of commodity prices as a monetary target occurred within the Federal Reserve Board during the late 1980s. Statements by monetary hawks, such as then-Governor Wayne Angell, and Chairman Greenspan indicated that gold prices were being considered as an early-warning signal following the easing in monetary policy in 1986 and 1987. The price of gold proceeded to drop 21% over the next four years and crude oil prices were stable until the Gulf War. Inflation jumped by 150 basis points during the same period, and the Fed raised the discount rate in tandem. Further mention of the usefulness of commodity prices as a monetary target has seldom been heard from the Board.

In the 1990's, the correlation between commodity prices and the overall price level has continued to fall. Gold in particular has lost its position as a primary store of value. The slippage in gold's importance has proceeded to the point that several governments are dramatically reducing their gold reserves, including Switzerland and Great Britain. This additional supply to the private market insures that excess-supply conditions will prevail for several more years. Gold will be worthless as an inflation indicator during this period.

Even though the significance of raw material prices has declined for the U.S. economy, large movements in commodity prices such as occurred over the past two years still have an impact. The 17% drop in commodity prices between 1997 and 1998 reduced inflation by 80 basis points (Chart 2). Commodity prices are still important for evaluating inflation prospects, but have less than half the impact of fifty years ago. They are no longer viable as a general monetary policy target, if they ever were."

Auri sacra fames.

Regards,

-- Mr. Decker (kcdecker@worldnet.att.net), August 09, 1999

Answers

Ah yes, as crude oil prices blew through $21 a barrel today and the CRB is poised to break through 200 we have a PUFF article on inflation. Yes indeed the new PARADIGM is on the minds of many a HOPEFUL Wall Street economist today!!

Ray

-- Ray (ray@totacc.com), August 09, 1999.

Decker: Interesting that your author, as late as July 1999, does not factor in

Y2K failures in the financial system

economic impact of the bursting of the largest speculative stock & derivative bubble in history

deepening currency crises overseas and in central and south America

increased chance of militarism in the post-2000 period

global manufacturing and supply line interruptions from the above influences

Are all economics experts this short sighted, or did you have to spend serious time looking for this rosey-spectacled idiot?

-- a (a@a.a), August 09, 1999.

I hear Dear Abby is recommending folks buy stocks and stay away from gold. LOL

-- Perplexed in SC (@ .), August 09, 1999.

How much do you folks want to bet that double-Decker actually has a pile of gold that he has acquired while the prices are low, so he can reap the profits when paper sinks and precious metals skyrocket? Nothing about this two-faced ass would surprise me

Hey Decker, WHEN did you say that your response to "a" would be on those economic questions that he posed. LOL.

-- King of Spain (madrid@aol.com), August 09, 1999.

Mr. Decker,

Granted, mining technology has expanded since 1985, otherwise the overhead cost of an ounce of gold would be higher. Here in the US, the overhead is about $215/oz.. South Africa however has not retooled as much as the American/Canadian mines and their cost is $244/oz.. With current prices of gold being in the $250-$260 range, there is very little profit in mining operations. IMHO, you will see mining companies liquidating, or closing down in the very near future if the POG does not rise back near $300/oz. They just can't afford to stay in business with that little profit potential.

So, who do you think will buy a defunct gold mine?? Bankers? Brokerage firms? You better believe it... So what happens when bankers and brokerage firms own the gold mines? Since they own the mines, wouldn't that be a good time to go long on gold??? If there is no production from the mines, wouldn't a "shortage" ensue???

As always this is MHO. There are no URL's, LOL. The information about overhead is on the USAGOLD.com website, and it can be found at gold- eagle.com if you dig for it.

scratchin' an itch...

The Dog

-- Dog (Desert Dog@-sand.com), August 09, 1999.

Mister Decker

While you are quite correct that the Commodities aren't likely to increase inflation I see the liquidity of the market as the real risk. As I understand it the big issuers of debt are trying to refinance early and that is tipping the interests rates up. So we might be looking at a higher risk because of the availability of credit to cover all the higher risk debt. Someone please correct me if I am wrong.

One of the results of the near meltdown last year with the hedge funds is that there is a required disclosure of derivitives as of the rollover. That is going to have a much greater impact on the economy than the price of wheat or copper. I personally think that Alan Greenspan has been protecting the inflationary pressures of commodities at the expence of fiscal responsability.

The only reason I would buy gold is to hang on to it till it actually would be worth something. Todays economics finds little value in it but thousands of years of human value can't be wiped out in a generation. That is bull. Mind you there is no telling when or if the value will rise or when. That is the part that makes life interesting.

Ken

This seems like an odd post for you to try. I have been collecting more information on the hedgefund collapse (FRB docs.) from last year if you are interested. Been thinking of revisiting the topic with the receint news of possible payment defaults.

-- Brian (imager@home.com), August 09, 1999.

I see the brain trust has weighed in (sans Andy.) The article is discussing the use of commodities as an inflation indicator. Instability on both the supply and demand sides make commodities (like gold) unreliable as inflation indicators. Seems pretty simple to me.

On an earlier thread, Mr. E. Grease wondered why I did not post more on economic topics. Perhaps the depth of thought found in the first handful of responses to this thread gives some clue. The author is not making a conclusion about the value of gold as an investment. He is not trying to predict the future. He is not analyzing the financial system, the equities markets, international finance, or the economic ramifications of an invasion of pod people.

In the past, gold prices have been used as an inflation indicator. The author correctly points out that a supply side glut will make gold "useless" in this regard. The "dumping" of gold will keep prices low unless there is a huge spike in demand. So, the Fed will not be watching gold prices when it comes to determing monetary policy.

No passing grades here.

On a side note, I answered 'a' in detail (the comparison between 1974 and 1999.) I am writing a piece on the Great Depression. There is a limit to how many bad economic ideas I can dispel on a daily basis.

Dog, you are talking about supply side issues. In fact, you support the author's thesis.

Regards,

-- Mr. Decker (kcdecker@worldnet.att.net), August 09, 1999.

Brian,

The post was interesting because it pointed out some of the supply and demand issues associated with commodities (like gold). Dog did a nice job of adding some supply side information. On the hedge funds, I still contend the Fed ought to have let LTCM hang. We would have had our recession early... but it would have taught the players no one is too big to fail. I think the Fed made a short-term save that will have long-term costs. Oh, and the post does demonstrate my band of merry followers read my name with greater accuracy than the content of the post.

By the way, have you ever given any thought to how useless gold is as a commodity? It's primary value is in exchange (and in decoration.) There is a narrow range of circumstances where gold will actually be useful... where it serves as a medium of exchange in a return to the 12th century. If we regress further, it has no use value. If we do not regress, it is simply another investment.

Regards,

-- Mr. Decker (kcdecker@worldnet.att.net), August 09, 1999.

For those without a Merriam-Webster's handy, Decker quoted Virgil: Auri sacra fames. It translates to "the cursed hunger for wealth" or, in simpler terms, "greed."

Here are some more handy Latin phrases:

http://www.zippynet.com/pages/latin.htm

Non calor sed umor est qui nobis incommodat.

It's not the heat, it's the humidity.

Di! Ecce hora! Uxor mea me necabit!

God, look at the time! My wife will kill me!

Estne volumen in toga, an solum tibi libet me videre?

Is that a scroll in your toga, or are you just happy to see me?

Cum catapultae proscriptae erunt tum soli proscript catapultas habebunt.

When catapults are outlawed, only outlaws will have catapults.

Purgamentum init, exit purgamentum.

Garbage in, garbage out.

Credo nos in fluctu eodem esse.

I think we're on the same wavelength.

Lex clavatoris designati rescindenda est.

The designated hitter rule has got to go.

Te audire no possum. Musa sapientum fixa est in aure.

I can't hear you. I have a banana in my ear.

Sentio aliquos togatos contra me conspirare.

I think some people in togas are plotting against me.

Antiquis temporibus, nati tibi similes in rupibus ventosissimis exponebantur ad necem.

In the good old days, children like you were left to perish on windswept crags.

Caesar si viveret, ad remum dareris.

If Caesar were alive, you'd be chained to an oar.

Quantum materiae materietur marmota monax si marmota monax materiam possit materiari?

How much wood would a woodchuck chuck if a woodchuck could chuck wood?

Nihil curo de ista tua stulta superstitione.

I'm not interested in your dopey religious cult.

(At a poetry reading) Nullo metro compositum est.

It doesn't rhyme.

Non curo. Si metrum non habet, non est poema.

I don't care. If it doesn't rhyme, it isn't a poem.

Quomodo cogis comas tuas sic videri?

How do you get your hair to do that?

Feles mala! Cur cista non uteris? Stramentum novum in ea posui. Bad kitty! Why don't you use the cat box? I put new litter in it.

Romani quidem artem amatoriam invenerunt.

You know, the Romans invented the art of love.

(At a barbeque) Animadvertistine, ubicumque stes, fumum recta in faciem ferri?

Ever noticed how wherever you stand, the smoke goes right into your face?

Neutiquam erro.

I am not lost.

Hocine bibo aut in eum digitos insero?

Do I drink this or stick my fingers in it?

Vah! Denuone Latine loquebar? Me ineptum. Interdum modo elabitur.

Oh! Was I speaking Latin again? Silly me. Sometimes it just sort of slips out.

-- Old Git (anon@spamproblems.com), August 09, 1999.

Deck: No you didn't. These two:

For Decker: Another reason the Y2K economic downturn will be worse than the 30's

Y2K Economics 101 for Decker

And we would like your explnation, ah, I mean, we would like you to "disel the bad economic idea" of the seeming fact that A. derivatives/hedge funds are getting ready to blow sky high in the next couple months B. the price of gold is being driven lower in an orchestrated attempt to manipulate wealth by the usual power players.

-- a (a@a.a), August 09, 1999.

Here's one Git:

Sco o Sr. Decker um shill que posing como um troll, ou um troll que posing como um shill?

-- a (a@a.a), August 09, 1999.

Decker commented:

"On the hedge funds, I still contend the Fed ought to have let LTCM hang. We would have had our recession early... but it would have taught the players no one is too big to fail. I think the Fed made a short-term save that will have long-term costs. "

Well now Decker, isn't it wonderful to say "we would have had our recession early" as though that would have been it.

Here we have an entire UNREGULATED derivatives industry of which LTCM is TINY piece of the pie and you have the ability, in hindsight, to predict that an early recession is what would have resulted if the Fed had let them fail ... HOGWASH!!

Your Pal, Ray

-- Ray (ray@totacc.com), August 09, 1999.

Mr. Decker Wrote

"On the hedge funds, I still contend the Fed ought to have let LTCM hang. We would have had our recession early... but it would have taught the players no one is too big to fail. I think the Fed made a short-term save that will have long-term costs."

Absolutely agree! Bailing out a failure was a stupid thing to do and sent the wrong message out. Not only that but it set a precident of the FRB being involved in such a manner.

If you realize this then you are in a position of conflict as there are lessons to be learned and I doubt they are going to be easy on the economy. Add the uncertianty of Y2K and we have a mess. Most folk have a hard time dealling with this conflict in your thinking. If one read the Frontline documentation with all the financial wizards saying we are screwed without Y2K, what differance will Y2K make anyway? We are still in deep shit.

As far as gold goes. As an artist gold is of value in my mind from the get go. Also you are looking at something that has value amoung the 6 billion folks in the world. I doubt that would change at the wim of the BOE and their games. Gold as a currency though would be a stretch of imagination at this time.

-- Brian (imager@home.com), August 09, 1999.

Mr. Decker, your posting about gold being a bad investment because some central banks are dumping their stocks does not address the issue that the sales are closed to the public and the dumped gold is going into the coffers of other central banks or large gold players like the LBMA. Surely you can see the manipulative factor involved in selling to the collective 'brethren'. The gold is staying 'in the family'. That turns these transactions into a whole 'nuther beast.

-- OR (orwelliator@biosys.net), August 09, 1999.

Brian commented:

" Gold as a currency though would be a stretch of imagination at this time."

Hey Brian, are you comfortable with our FIAT money system?? Are you comfortable with the fact that the banks MIGHT be able to cover 2% of their deposits?? Do you believe in the "New Paradigm"??

I think you and Decker have been watching CNBC to long.

Ray

-- Ray (ray@totacc.com), August 09, 1999.

Ray mentions

'Brian commented:

" Gold as a currency though would be a stretch of imagination at this time."

Hey Brian, are you comfortable with our FIAT money system?? Are you comfortable with the fact that the banks MIGHT be able to cover 2% of their deposits?? Do you believe in the "New Paradigm"??

I think you and Decker have been watching CNBC to long.

Ray

-- Ray (ray@totacc.com), August 09, 1999. "

Ray

If the system collapsed I would use fish for currency before gold. One has to use their heads if the present status quote folds. Gold would be usefull for a bulk investment, but as a currency it has several drawbacks in this day and age. Not the least a lack of awareness of all things gold, (measurement, purity, means of exchange between others) it would seem that other methods of exchange would be better. Grain would have more relevance in folks lives than gold.

By the way I would barter as a better idea in time of uncertainty.

Also drugs I am afraid to say would be money in the fall of the present system.

By the way Ray I would advise you not to tell me how I think. I don't tell you how you think ......right? I am sure Mr. Decker will confirm that I do not see eye to eye with him on many issues.

-- Brian (imager@home.com), August 09, 1999.

Hey Brian, you might want to take time out and read up on the role of gold and silver throughout history. Could be enlightning !!

Ray

-- Ray (ray@totacc.com), August 09, 1999.

"a," as soon as I finish the Great Depression piece, I'll polish off the other post. Trust me, it won't be any trouble. It make take awhile to get to the "gold conspiracy theory" and the "hedge fund meltdown." In the mean time, you and Ray might benefit by reading Mark Zandi's analysis:

http://www.dismalscientist.com/thoughts/requiem.stm

"Requim for the Liquidity Squeeze

Analysis by Mark Zandi

Written April 7, 1999

Monetary policy is firmly on hold. The FOMC reaffirmed this position at its late March meeting by holding the federal funds rate at 4.75%. The Fed also continues to maintain a neutral bias with respect to future monetary policy, meaning that the Fed is equally likely to raise rates in coming weeks as it is to lower rates. Financial markets are convinced. Federal funds futures prices imply an unchanged funds rate through the summer.

There will be no pressing need to tighten monetary policy as long as inflation remains dormant. Rising oil prices will lift consumer prices more quickly, but core or underlying inflation shows no sign of accelerating. The core CPI has been more or less unchanged for more than a year at just over 2%. Strong productivity gains are offsetting, at least to date, any acceleration in labor costs. The need for further monetary easing has also faded with the continued strength of the economy. Real GDP growth is barreling along at a 4% pace and the unemployment rate is quickly headed to 4%.

Hard to believe, but it was only six months ago that the Fed was aggressively easing monetary policy. The Fed lowered the funds rate three times by 75 basis points in the span of approximately six weeks between late September and early November. One of those easings occurred very symbolically in between meetings of the FOMC.

The Fed acted so aggressively because financial markets were in the grip of a so-called liquidity squeeze. Global financial markets virtually seized up in the wake of Russia's bond default and the de facto failure of the huge global hedge fund, Long Term Capital Management. Credit and liquidity spreads soared. The spread between BAA corporate bonds and 10-year Treasury yields, for example, rose from 150 basis points at the start of 1998 to 275 basis points at the height of the crisis in early October. The yield spread between the most recently issued on-the-run Treasury bonds and previously issued off-the-run bonds also widened considerably. The only difference between on and off-the-run Treasuries is liquidity.

During the depths of the crisis, stock and bond issuance also came to a virtual standstill. Only $17 billion in new stocks were issued during the three months ending last October, the weakest issuance for a three-month period in over three years. For a brief period, even highly rated U.S. corporations found it difficult to tap capital markets. Commercial banks also made it more difficult for corporate borrowers by tightening their loan standards and raising the cost and lowering the availability of capital. A special Fed survey of senior loan officers last September showed that the highest proportion of banks was tightening standards since the credit crunch of the early 1990's.

In contrast to the credit crunch, when many banks and thrifts were unable and unwilling to lend due to inadequate capital levels, the liquidity squeeze was the result of unwilling lenders. Capital was in plentiful supply, but lenders failed to provide credit due to the fear that they would lose their money in a global financial meltdown.

The Fed's actions were overwhelmingly successful, quickly vanquishing the liquidity squeeze. The Fed had little choice but to respond strongly to the deepening crisis, it was acting in its role of lender of last resort, to ensure that financial markets did not fail to operate due to a lack of investor confidence. Investor confidence has indeed been restored. The stock market has fully rebounded and then some, and stock and bond issuance has soared to new records. Credit and liquidity spreads remains unusually wide, but they have narrowed substantially.

So, isn't this old news, simply a rehashing of what seems like a distant memory? Yes, but while the liquidity squeeze is old news a reexamination offers new insights. Economists learn little when things go according to script. It is when the unexpected happens that the true workings of the economy reveal themselves. What then have we learned from the liquidity squeeze?

Foremost, we learned that confidence is a fragile thing. Consumers, businesses and especially investors were plunged into seeming despair over the events of last fall. This despite an economy that was performing just as well then as it is today. The economy was expanding strongly, unemployment was low, inflation was nonexistent, and interest rates were falling. The Russian bond default was large, as far as bond defaults go, but it was for less than $10 billion, not much more than the value of bonds defaulted on by U.S. corporations last year. Sure, things weren't going quite right and global policymakers were dithering, but does what happened in Russia explain a 20% decline in the S&P 500, a doubling in corporate credit spreads, and a 15% plunge in consumer confidence?

The liquidity squeeze has exposed just how quickly confidence in the U.S. economy, which is key to its astonishing performance, can come unraveled. This likely reflects a deep-seated concern that the economy and financial markets may not be on completely firm ground. Just how much of the current economic nirvana is real and long lasting, and how much of it is the result of just pure luck and raw speculation?

The events of last fall have also taught us of the power of global capital markets. When capital is flowing freely and particularly flowing in, things could not appear better. When capital stops flowing and particularly when it is flowing out, things could not look worse. Asian and South American governments, businesses and households know this first hand. U.S. policymakers know this as well, but have to date been able to spare U.S. businesses and households. Other than a few subprime mortgage and consumer lenders who went belly-up and a few construction projects that were delayed, the U.S. economy went untouched. The amazing thing, however, is that U.S. businesses and households were only weeks, if not days, away from feeling the full fury of global capital movements.

This then highlights another lesson of the liquidity squeeze, and that is the importance of the Federal Reserve Board. The Fed is arguably the most important global institution. It's actions along with its credibility were the key differences between what is now a recession engulfing one half the world's economies to a full blown global downturn.

The Fed's actions to quell the liquidity squeeze have not come without a price, however. Whenever there is a bailout, which is what the Fed did for global investors and economies, moral hazard develops. The IMF has been criticized because its bailouts of various economies over the years have arguably induced investors to take on more risk, sensing that if they get into trouble the IMF will ultimately always be there. The moral hazard in the Fed's actions can be found in the U.S. stock market. Why worry about the global economic and financial problems when the Fed has demonstrated an ability and willingness to step in when things get really tough. Just another reason to buy more stocks and for equity prices to be back breaking new record highs. The irony in this is clear, given that the monetary authorities have long been wringing their hands over an overvalued stock market.

The requiem for the liquidity squeeze is being sung, but its lessons will be heard for a long-time to come."

Mr. Zandi and I (and Brian) agree. You may also find the original FRB testimony useful.

http://www.bog.frb.fed.us/boarddocs/testimony/1998/19981001.htm

http://www.ny.frb.org/pihome/news/speeches/MCD981001.html

Ray, as a libertarian I am generally against regulating commerce including financial markets. While you may support government intervention in the marketplace, I am more of a free market fellow. Government actions tend to distort markets. If you have ever heard of unintended consequences, you know what I am talking about. And if you are so tired of fiat money, send yours to Brian. He could use a few extra bucks.

Or, the post does not say gold is a bad investment... just a bad inflation indicator. For the record, however, if you took Gary North's advice and purchased gold in the early 1980s, you'd have to work pretty hard to find a worse investment.

Regards,

-- Mr. Decker (kcdecker@worldnet.att.net), August 09, 1999.

Decker commented:

"Ray, as a libertarian I am generally against regulating commerce including financial markets."

Decker, if your a Libertarian I'll eat my hat.

Why did we have silver in our coins and gold backing our currency??

What happened when we went off the gold standard??

Ray

-- Ray (ray@totacc.com), August 09, 1999.

>>Mr. Zandi and I (and Brian) agree<<

Mr. Decker,

!!Whew!! I think you've officially joined the doomer side. How does it feel? :-D

Mr. Elbow Grease

-- Elbow Grease (LBO Grise@aol.com), August 09, 1999.

Libertarian Self Reliance in the face of Y2K

http://www.geocities.com/ResearchTriangle/Lab/7731/index.html

-- (for@ken.decker), August 09, 1999.

Before you start chomping on your headgear, Ray, let me clarify. I am not a member of the Libertarian party nor do I subscribe to all of the party doctrines. Like most political parties, they have some bad ideas. For me, it's more a philosophical bent. By the way, Ray, when there was a "gold standard," countries cheated. The faux gold standard also exacerbated the Great Depression. More on that later. When we went of the gold standard... well, gold bounced around then reached it's market level as commodity. Have you ever read about the populism in the late 1800s, Ray? Just curious.

Regards,

-- Mr. Decker (kcdecker@worldnet.att.net), August 10, 1999.

Decker commented:

"Before you start chomping on your headgear, Ray, let me clarify. I am not a member of the Libertarian party nor do I subscribe to all of the party doctrines. Like most political parties, they have some bad ideas. For me, it's more a philosophical bent. By the way, Ray, when there was a "gold standard," countries cheated. The faux gold standard also exacerbated the Great Depression. More on that later. When we went of the gold standard... well, gold bounced around then reached it's market level as commodity. Have you ever read about the populism in the late 1800s, Ray? Just curious. "

Well Decker, it looks like my hat is quite SAFE !!

Now on to more important things. Governments may have cheated but there was a LIMIT to their cheating. After Nixon took us off the gold standard (prompted in part by that infamous leaders guns and butter fiasco) the Politicos didn't have to CHEAT anymore. The results of their playtime activites were soon evident, we had the most serious recession since the great depression and interest rates pushing 20%.

The Fed and our illustrious Administration have created the largest financial bubble in the history of the world (let the good times roll, we need those votes) and like all of their predecessors feel THEY can control our economic destiny (fools that they are).

It is estimated that we are now sitting on a derivatives industry of between 70 and 100 TRILLION dollars, most of it unregulated. Now I know that you believe the folks dabbliing in these hedges are RESPONSIBLE and COMPETENT. I did leave out GREEDY since you would NEVER come to this conclusion.

Keep your eye on the ball Decker, this Administration and Fed is about to STRIKE OUT, in the bottom half of the ninth inning with the bases loaded.

Your Pal, Ray

-- Ray (ray@totacc.com), August 10, 1999.

Decker:

The Constitution says that gold and silver shall be the ONLY money in the U.S., and that Congress shall be in charge of coinage (read money supply), NOT the frigging Federal Reserve Board. What say you to that, shillibertarian? (oooh, thats not a melanoma, it's a nice big beautymark).

-- Pinkrock (aphotonboy@aol.com), August 10, 1999.

Ok, I need some help, here. Brian?, Linkmeister?: There is an excellent essay by Greenspan (no doubt from the days before he was seduced by the dark side, er, uh, I mean became a CREATURE of the FED), titled "Gold and Economic Freedom." I have lost the link. Could one of you super-geeks locate and post it, please? Maybe even on a new thread, this one's getting pretty long.

Thanks, gotta go put up some more solar arrays, now. Hope I don't get hit by an ECLIPSE or a CME.(it's a joke, Decker).

-- Pinkrock (aphotonboy@aol.com), August 10, 1999.

Mr. Decker said "...........or the economic ramifications of an invasion of pod people."

Dagnabbit Decker.........you know what you've done by mentioning that don't you?????

Now approximately 65% of the doomers will add "pod people" to the list of things they are convinced will lead us to destruction come the new year.

There will be new threads started such as this: What is more foreboding to you, the white van threat or the pod people possibilities.......

Speculation will arise that perhaps the pod people will arrive on the meteor that will hit us on September 23rd and will eat all of us that are not instantly destroyed by the comet........

You know Decker, in most places you can speak about things like pod people and the listeners will know you are only joking. However to speak of pod people here where you just know it will be swallowed hook, line and sinker as the gospel truth is pretty reckless ;-}

-- Craig (craig@ccinet.ab.ca), August 10, 1999.

Ray, here's a little piece for you to read:

http://www.slate.com/dismal/96-11-22/dismal.asp

By the way, there wasn't a "limit" to the cheating, per se, nor did the move off the gold standard "cause" the 73-74 recession. Oh, and I am happy with "greed" as a motivation. Self interest is the engine of capitalism. It's the people full of "good intentions" that make me nervous.

"Pinkyrock," sorry, but the current system is constitutional. You may not like the Federal Reserve, but personally, I'd rather have an independent central bank than the U.S. Congress running the presses. How about you?

Regards,

-- Mr. Decker (kcdecker@worldnet.att.net), August 10, 1999.

Pinkrock commented regarding Decker:

"What say you to that, shillibertarian?"

ROTFLMAO ....... this is definitely a keeper!!

Ray

-- Ray (ray@totacc.com), August 10, 1999.

Mr. Decker,

I personally would like for the government to be the keeper of the coinage. I have a problem with my "money" being managed by private enterprise, especially private enterprise bankers...

I just hope the confidence in the fiat money continues. I am not ready for a barter system, IMHO.

Thanks as always Mr. Decker. I appreciate your posts.

scratchin' an itch...

The Dog.

-- Dog (Desert Dog@-sand.com), August 10, 1999.