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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: mishedlo who wrote (2240)	11/17/2003 2:17:08 AM
From: Lazarus_Long	of 110194

D**n, you're cheering! :-) I was thinking along the same lines tonight. AG became addicted to the power of liquidity when he "saved the nation" in '87. Coming out of the early '90s recession, he pumped the gas too long- -maybe knowingly. When he finally realized the jalopy was flying out of control, he slammed on the brakes- -and stayed on them too long, inducing another recession (the none we are [MAYBE] pulling out of). Then he hit the gas again- -hard 1% interest rates, again for too long. The gov't numbers admit to 2% inflation. These guys don't believe them. money.cnn.com So: It appears we have a weak but recovering economy, but inflation is rearing its ugly head. The Fed has always considered inflation Public Enemy Number One- -it must be controlled regardless of other costs. And the way to control it is HIGHER INTEREST RATES. So there may be more reasons that just defending the US$ to raise rates. And your vision of falling stocks AND bonds doesn't look at all unlikely. What looks unlikely is avoiding that. We're in a world of hurt.

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