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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Perspective who wrote (245553)6/13/2003 12:36:18 PM
From: reaper  Read Replies (5) of 436258
 
<<what probability would you ascribe to the possibility that global currencies are turned to confetti in a 1970s-style stagflation>>

i ascribe this basically a zero probability. won't happen. reflation either basically 'works' and we get high (at least by current standards) but not cripling inflation (say somewhere in the neighborhood of 3 1/2 - 4%) that allows nominal earnings to outstrip current fixed debt obligations, or we collapse into my preferred liquidity trap money goes to heaven faster than the fed can print it deflationary scenario.

so, if forced to pick a direction for long rates, i would say they keep going down. that said, i don't find it to be a compelling risk-reward bet at these levels, so i have moved to the sidelines (into 'cash'; actually 3-month bills).

Cheers
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