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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (12232)4/19/2004 10:11:58 PM
From: Jim Willie CB  Read Replies (1) of 110194
 
agreed, but China could engineer the inflation process
they have higher prices inside the pipeline right now
US firms will see greater pricing power,
but it will do little to assist profit margins
since costs are rising too fast
PRICING POWER WILL RETURN TO USA WHEN CHINA ENFORCES IT
but it wont mattah

few seem to realize that inflating our way out of debt will kill the credit market
if someone can refute that simple statement, please do so

for that reason, I believe we travel down the liquidity trap highway
which is really misnamed, a misnomer
plenty of liquidity, even in places like Japan in recent years

cash is preferred in a secular deflation environment when big assets have begun their downward spiral
(e.g. real estate)
even if monetary authorities pour out the money supply,
it dont mattah
cash will still be sticky in pockets

/ jim
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