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

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To: eddieww who wrote (46293)12/11/2000 6:05:36 PM
From: pater tenebrarum  Read Replies (3) of 436258
 
<<They wouldn't wane very fast if the fed eased .50 next week and promised much more soon.>>

don't be so sure.

services.elliottwave.com

note: PPI FELL by 7,8% in 1931.

the question of whether liquidity (read: MORE debt) can be created with the credit bubble having reached $27 trillion is the crucial question. at no juncture before the current one has private sector debt been as high, in both absolute and relative terms.

yes, a crash in the dollar would likely fuel inflation expectations...it would also be the end of the fiat monetary system as we know it, and therefore represent a completely different ball game. it would mean the US would be the 21st century Weimar Republic...with deflation raging everywhere else in the world.

here's Ed Bugos on the subject, who supports your view, very eloquently:

safehaven.ca

the debate over this will likely rage on until a definitive outcome becomes obvious...i hold that the Fed will rather support the dollar (and with it the lenders) than the debtors, if it has any sense of history...an interesting historic fact being that big inflation episodes are socially much more destabilizing than deflationary periods. Hitler vs. FDR in short.
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