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----- Original Message -----
From: "sue crew" <screwy@xxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Friday, November 08, 2002 8:50 PM
Subject: Re: [RT] Answer my friend
> Earl,
>
> what is your view of things at the moment.? The USA to me looks like the
> big titantic sinking and nothing is going to help.
> Monetary policy will be ineffective - and close to zero just like Japan.
> Everyone due to Superfunds are heavily weighted to equities, the ageing
> population and risk aversion will drive markets in my mind, and will
> particularly drive equity markets down. The information ratio will
> become the new focus.
>
> Cash and bonds will rule for the next 15 years.
NW: Why would you want cash when there is a negative real interest rate?
Under this scenario,
money will depreciate in value. As for the mythical deflation, anyone notice
the CRB is up 22% since one year ago? So where is the deflation? It's in
paper assets such as stocks. Yes, this situation should continue for many
more years. War and cheap money makes for an excellent commodity market,
which is where I have had my money for the past year and I strongly
recommended to this list to go one year go. War and cheap money also means
deflation or shrinkage for stock valuations which means even during an
economic recovery, the stock market will underperform the underlying
fundamentals. Look at the Nikkei for the past decade. You can see it was a
loser's game for the investor and at best a game strictly for short term
traders. If you don't want to work too hard, wait for the next commodity
fire sale and then buy, buy, buy. A study of the 1873-1895 period in US
economic history should be enlightening. Study the life and business
strategy of Andrew Carnegie.
Buy Buy,
Norman
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