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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 670.92

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Nov 7 4:00 PM EST

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To: Box-By-The-Riviera™ who wrote (55711)	6/29/2000 9:52:00 AM
From: pater tenebrarum	Read Replies (3) of 99985

Joel, i think the reason why things are likely to come to a head is the fact that the global economy is now synchronized...thus the demand for capital and resources worldwide is beginning to outstrip the available supply. the result are rising rates, widening credit spreads and rising raw materials costs, especially energy. and one thing a debt bubble is ill equipped to deal with are widening credit spreads and an inverting yield curve. this is why the situation is more dangerous now than it has been previously. furthermore the trade/current account deficit has simply become too big, and its rate of growth too daunting. to bring it back into line, the US economy must slow down drastically, and the dollar must fall. that will lead to foreigners dumping US paper assets... however, the demise of the bubble in the near future is not something that is set in stone...it has proven extremely resilient in the past, and the Fed is trying its best to keep it going by massive reserve injections. regards, hb

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