I believe the Fed will cap longterm rates for a while
but they cannot indefinitely
the key in my view is imported price inflation
from Asian goods
if we see a big lift in finished and component product prices from non-China Asia, then it will be impossible for the Fed to contain interest rates without a dollar freefall
domestically, rising costs are hurting everyone
but that has not translated into higher prices
the long bonds will reflect higher prices
so far they have not, since stocks dont look all that appealing
but all inflation is not created equal
the new REFLATION effort has only resulted in bad inflation so far
economists are becoming increasingly perplexed
they cannot distinguish among...
price inflation, price disinflation, price deflation, falling asset prices, rising costs, expanding monetary supply
the dollar is clearly being sacrificed in order to keep longterm rates down
I think this ends in a monetary crisis
with the dollar at the epicenter
in the shorterm, I agree with you
in the nearterm, I think it will be hard for the Fed to succeed
in the longterm, it will be utterly impossible to keep rates down
the question becomes: can they hold off rising domestic prices (from whatever source) until Sept-Nov 2004 ???
I say no, hell no, no effing way
that is over a year away
you seem to think that your call over the last 6 weeks means they can continue over the next 60 weeks
I dont agree
we will see
/ jim
p.s. how is the USDollar doing so far??? |
