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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (3888)12/26/2003 1:05:51 AM
From: Joan Osland Graffius   of 110194
 
Mish,

I do not know if I would invest in Japan after they clean up the non productive loans. Investing for me means return on invested capital and we would have to dig into the balance sheets of companies to see if there are returns for the stock holders.

Under normal conditions during deflation the interest rates of sovereign debt should be very low. The problem with the US is we do not have normal times. IMO, our central banker and our government are not in control of their destiny. In other words the economic power institutions in this country have lost their power to manage the destruction of non productive capital because they have sold their soul to the company store. The interest rates in this country will be determined by our bankers, a.k.a. South East Asia, China, Japan, Europe, OPEC, and others that own the debt.

It is my opinion the Fed funds rate will stay low for a very long time "unless" our central banker has to do something to attract capital to cover the borrowing requirements of the government. I believe the Fed funds rates are low because Greenspan has some banks that have serious repair problems as well as no one wants or can qualify for new loans. Anyone with any brains knows that something is rotten in Denmark when Fed funds rates are at 1%.

I suppose we could start threatening our bankers with our military, but I hope the people in this nation would rise up against this idea. <g>
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