Difference between now and the 1980's

[ajl]

It would seem that governments can get
away with printing money these days and
by so doing keep bubbles inflated
indefinitely. What happened in the
1980's that the same could not have been
done then? No government would have
allowed the interest rates to rise then
because a lot lost their jobs after the
early 80's recession. So what happened
then that allowed it to come unglued
then but not now?

[cottonpicken]

The central banks of the world weren't buying bonds
to the degree they are today,they let the market
function and allowed yields to be pushed up to 18%.

If they ever go back,sell the farm and by bonds,just
like farmers should have done in the early eighties.

Further down Tom asked how this effects us.

My believe is that the market is still a force unto itself
PERIOD

The purchasing power of an ounce of gold or barrel
of oil or a bushel of wheat or a pound of copper is
like holding a ball under water.

The economic laws,like the laws of physics i.e
gravity,can not be changed only manipulated for
short periods.

What is the purchasing power of a bushel of
wheat,you simply have to goto historic ratios on all
sorts of things to come up with fair market value.

Do not think of it in terms of price but VALUE.

[errolanderson]

Massive technically-based fund buying in
grain futures this morning. Impressive
U.S. jobs numbers may be in-part be the
spark. Canada's job numbers were not
great.

USDA report was at best neutral

Interestingly, the U.S. dollar is up
sharply which normally would be negative
grain markets. Big volatility ahead.

Cattle board under heavy selling
pressure again today.

Errol

[rhoff]

I read an article that took the price of oil during the
early 70's when the oil embargo hit and adjusted
them with today's dollars. And basically oil would
have been around 250.00 in today's dollars in
1974. Which would have been around 10% of
disposable income compared to our prices now
which are about 4.5% of disposable income. I
believe we have yet to see the the results of the
great reflation carried out by central banks.