Zeev's Turnips Patch-No Politics (ZEEV)

[CoalTrain]

I saw a head line passing a newsstand today that said OPEC was reducing oil production by %7. This at a time of tension in Venezeula the largest oil producer outside of the middle east. I don`t think gold will retrace much until things calm down in either Venezuela or the middle east.

Saville on the dollar

http://www.gold-eagle.com/editorials_02/milhouse121802.html

Saville defines deflation in terms of money supply ( which has gotten bigger not less ) not "over capacity" I believe that during the deprssion there was a true reduction in money supply and if memory serves correct gold prices went lower with everything else in the depression. I suspect that over capacity of somethings work like excess dollars. Overcapacity of oil for instance, or over capacity of battery powered cars that do 80 mph could travel 400 miles on an over night charge so we could tell the Saudis to keep their oil. I have a hard time believing that Over capacity of fiber optical cable under the Atlantic and other such things in the telcom sector are going to have much effect on lowering the cost of food, gas, heating oil ect.

Steve Roach is the only one that has made any arguments about a possible deflation that make sense to me. If anyone has links to articles that make good arguments ( with clearly defined terms ) for deflation becuase of "over capacity" I would appreciate the link.

TIA

CT