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IF YOU buy the idea of a soft landing and the rational management of the business cycle by the White House economic staff, then the long bond should be heading below 5 per cent and gold tottering and about to fall to $300 an ounce or less. But if, like me, you place more credit in the notion of original sin than in the notion of the perfectibility of man, then you should be selling the bond with both hands—don’t wait for it to get back to the 5¾ per cent level of October 1993—and buying gold even as it rallies.

Yes, we are going to have a very soft first half of 1996. I am inclined to think we’ll see negative growth, as the economists say. “My worry,” says Susan Sterne, “is that any shock will make the economy even worse than we anticipate.” Susan, a/k/a Economic Analysis of Greenwich, knows the American consumer better than anyone else, and she doesn’t like what she sees in income and debt trends. “The household survey of employment is more reliable at calling turns in the economy than the payroll number the bond market follows, and the household number is showing a sharp decline. The payroll number will be revised downward. In fact lots of growth and income numbers are being revised downward.”

JD

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John Dizard

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IF YOU buy the idea of a soft landing and the rational management of the business cycle by the White House economic staff, then the long bond should be heading below 5 per cent and gold tottering and about to fall to $300 an ounce or less. But if, like me, you place more credit in the notion of original sin than in the notion of the perfectibility of man, then you should be selling the bond with both hands—don’t wait for it to get back to the 5¾ per cent level of October 1993—and buying gold even as it rallies.

Yes, we are going to have a very soft first half of 1996. I am inclined to think we’ll see negative growth, as the economists say. “My worry,” says Susan Sterne, “is that any shock will make the economy even worse than we anticipate.” Susan, a/k/a Economic Analysis of Greenwich, knows the American consumer better than anyone else, and she doesn’t like what she sees in income and debt trends. “The household survey of employment is more reliable at calling turns in the economy than the payroll number the bond market follows, and the household number is showing a sharp decline. The payroll number will be revised downward. In fact lots of growth and income numbers are being revised downward.”