something is very wrong, page-48

"I have no idea" - apt name.

So, when inflation goes up you short gold stocks??!! When financials are in a mess you short gold stocks??!! When central banks are cutting rates you short gold stocks??!!

Any trade shorting gold stocks is not backed up by fundamentals so hope you can live with the rebounds. Or you could follow the mob and lose out.


"Greenspan sees stagflation signs
Email Print Normal font Large font AdvertisementAdvertisementDecember 17, 2007 - 4:02PM

The US economy is showing early signs of stagflation as growth threatens to stall while food and energy prices soar, former US Federal Reserve chairman Alan Greenspan said today.

In an interview on US network ABC's This Week with George Stephanopoulos, Greenspan said low inflation was a major contributor to economic growth and prices must be held in check.

"We are beginning to get not stagflation, but the early symptoms of it," Greenspan said.

"Fundamentally, inflation must be suppressed," he added.

"It's critically important that the Federal Reserve is allowed politically to do what it has to do to suppress the inflation rates that I see emerging, not immediately, but clearly over the intermediate and longer-term period."

The US central bank has lowered its benchmark interest rate three times since mid-September as a housing downturn, tightening credit conditions, and steep food and energy prices threaten to push the US economy into recession.

But cutting rates can have the unwanted side effect of pushing up prices, so the Fed finds itself in a tricky position of trying to revive growth without spurring inflation.

Last week, US data showed that wholesale inflation rose at the highest rate in 34 years, while consumer prices rose the most in more than two years.

Greenspan repeated his assessment that the probability of a US recession had moved up toward 50% but noted that corporate America's debt levels were in good shape, which should help cushion the blow from tightening credit terms.

"The real story is, with the extraordinary credit problems we're confronting, why the probabilities (of recession) are not 60% or 70%," he said."