David Fuller's view This is the fifth week during which I have posted scanned versions of the original hardcopy Fullermoney sequentially. Not having reread these issues for 26 years, I find the back history helps me to view today's dramas in better perspective, not least regarding extreme views with which investors have always had to contend.

For instance FM5 opens with a lengthy discussion of the inflation versus deflation debate. Two extremely well know economists - Milton Friedman and John Kenneth Galbraith - were both predicting that US inflation would rise to 10% by yearend! Remember, Paul Volcker was in the 5th year of his Chairmanship of the US Federal Reserve and had been appointed to wring inflation out of the US economy. Recall also that the Reagan dollar was soaring at the time on high interest rates, while prices for gold and most other commodities were in downtrends. None of this was a recipe for 10% inflation.

What can we conclude from this? It reinforces my view that most extreme forecasts are grandstanding, attention seeking, narcissistic and more emotional than analytical. Fortunately, I was expecting disinflation in FM5, because I was looking at the price charts. In fact, we were in the early years of one of the great disinflations and it would prove to be very good for stock markets. I was shorting commodities at the time, including palladium, and the USD was so strong that central banks were beginning to intervene in 1984. I had been bearish of stock markets for five months and was advocating lower trailing stops to lock in more of the profits.

There is a long editorial section on South Africa in FM5, which I had visited again in July 1984. This was almost ten years before Nelson Mandela became president. On a visit to Mala Mala I discovered the perfect market cycle.