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

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To: Joan Osland Graffius who wrote (232116)3/29/2003 4:40:16 PM
From: Mark Adams  Read Replies (2) of 436258
 
If we devolve into a debt deflationary scenario, efforts by Bernake et al to hold real rates at zero/negative will effectively transfer wealth/income from savers to debtors. Thus alleviating the debt burden creating the deflationary influence.

It may be that enough balance sheet repair is already in place to see a slow growth inflationary period with rising nominal interest rates (though low real rates) near term.

I'd say from a chaos theory perspective, it could go either way.

Much more will depend on the non US world reactions to current events than I considered six months ago. And as goes the US, I suspect the trends towards globalism will follow.
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