The Residential Real Estate Crash Index Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: GraceZ who wrote (6529)	11/3/2002 9:24:41 AM
From: SouthFloridaGuy	Read Replies (1) of 306849

Grace, I think the Fed is in a pickle here. Reinflating will be unsuccessful, IMO, because the absolute levels of debt are so high. As Mucho mentioned, the cost of capital is not falling for companies, but in fact rising. This makes the Fed quite useless except for keeping short-term borrowing possible. The most likely scenario of the Fed's reflation efforts will be an Argentina like situation where there is a pull out by investors which spurs a dollar devaluation, inflation, but no growth. I have waffled on the outcome of Fed efforts for 18 months now (deflation or stagflation). I have hedged this "bet" as a gold bull; I am betting on the inflationary recession type scenario and it seems that the market is too. In this scenario the dollar hegemony will be over. Financial assets will tumble, while hard assets will appreciate. The only reason we haven't seen inflation yet is 1) world instability has spurred a flight to quality (dollar) 2) debt levels are so high that the fed can't print enough to match liquidation levels.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next