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

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To: dpl who wrote (71425)10/8/2006 4:21:34 PM
From: kris b  Read Replies (2) of 110194
 
"All these TOMO'S and TIO'S will do nothing AFTER the credit bubble pops.It will not create credit or put money into people's hands"

So what? Even if it puts money into the people’s hands it doesn’t do any good. It is all about psychology of the masses. If crowd is scared enough they will put that money under the mattress or pay down the debt. Velocity of money will collapse and nothing will get transmitted into the real economy. It is called liquidity contraction/crisis. This is the biggest fear of the Heli-Bens of this world.
It is not that BOJ didn’t try hard enough. It did try more then hard, but population elected to stash it away rather then spend it. Real economy was starved of the fuel that was being hoarded.
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