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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Nadine Carroll who wrote (105783)5/31/2001 10:25:04 PM
From: craig crawford   of 436258
 
>> I cannot understand how any coming stock/real estate collapse can be deflationary while the Fed is printing dollars at such an amazing clip. <<

The way I see it world bankers have been on a printing spree for years now. We have had inflation, it was just focused in financial assets such as stocks and bonds, and then it spilled over into real estate. Now we have a deflation in financial assets, i.e. stocks and that money has to go somewhere, correct? It cannot just disappear. It is going to go into raw materials and commodities. Of course rising prices for energy and other commodities are going to put the squeeze on corporate profits even more and draw more money away from stocks and more into raw materials creating a self fulfilling prophecy until we have another commodities bubble that bursts and we repeat the process all over again. This happens every 20 years or so.

Corporate profits may deflate
Stock prices may deflate
Bond prices may deflate
Real estate may deflate
Raw Materials and Commodities will inflate
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