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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who started this subject6/21/2004 9:04:57 PM
From: glenn_a  Read Replies (2) of 110194
 
Endgame - Jim et al.

Jim, enjoyed your Endgame piece very much. To summarize, here's what I took from your article:

1 - Massive debt is a powerful deflationary force.

2 - Fed offsetting deflationary pressure with massive monetary stimulus.

3 - Outstanding GSE debt being monetized.

4 - Extreme monetary growth is very bearish ultimately for both interest rates and the US$.

5 - Real economy is in trouble due to both higher interest rates and a deflationary rise in commodity prices, particularly energy.

6 - It will be a challenge for the Fed to keep the economy liquid.

7 - Interest rates are currently at an artificially low level. Such artificially low interest rates are ultimately unsustainable, leading to what you call a "Interest rate trap".

8 - Bonds are also ultimately very vulnerable, as interest rates eventually rise (normalize?)

Does this capture the salient points Jim? Anything you would add as a core message of your article today?

Best regards,
Glenn
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