A response to the "KING Report" for November 13th, 2003:

"A repeat of Great Depression-type deflation is crap. I don't see how
it can happen now without a gold standard (and even the first time
around Roosevelt revalued the USD down about 40% in terms of gold) and
the policy wonks we have in place. Unneeded items will fall in price,
but the essentials will rise. An adjustment is needed to purge the
system, but it won't happen voluntarily. I do, however, see a chance
of a 'rhyme'.

Asia went through our current situation in the 90s. It started with
massive injections of "liquidity", followed by a spike in
rates/inflation, then an equally massive currency devaluation. And
they had current account surpluses to help dig them out!

I'm now convinced (but check back in 2 days, I'll probably have changed
my mind!) that this is the late 70s/early 80s all over again (price and
rate inflation) with a couple of major differences: debt levels (on
every level) and cross-dependency in derivatives (with financial sector
by far the biggest player in practically every market).

USD will fall (more), gold will rise (more), and if a shock doesn't
bring the debt house of cards down first, last will be debt liquidation
(and therefore the housing market). At that point, political problems
will dwarf the slowdown in commerce.

If the Fed pulls off, by virtue of confidence in Greenspan only, the
best-case scenario (Japan-style languishing until we hit retirement
age) it will be a miracle. Otherwise, it will pretty much suck.

Cheery, huh?"