Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: studdog who wrote (16361)	11/19/2004 10:20:58 PM
From: Square_Dealings	Read Replies (3) of 116555

I think the money supply is contracting because everyone is tapped out and cant borrow any more. The Fed pushed on the string for too long. The idea that: now we are screwed and the dollar will get stronger is twisted imo. The US has destroyed the concept of savings. After 911 the message was "the patriotic thing to do is get out there and buy buy buy". Bonds used to be purchased by people with savings and they got paid interest for use of the money. Now the banks print up bonds 100:1 for every dollar they have on deposit and loan money out to build McMansions. The dollar is like a sports car that got driven into the ground, clutch burned out, gears stripped and now the owner is worried that its lost its value. So they immediately start driving more conservatively and expect that it will increase in value. I have no idea how far the dollar will fall but it might help to restore confidence if the government would approve a new budget, the federal pension guarantee fund wasnt short 30 Bln, and Fannie Mae or Freddie Mac could actually produce a financial statement. It would also help if money markets paid more than 0.7% interest M

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