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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Carlos Blanco who wrote (22900)12/5/2004 11:32:27 PM
From: Tapcon  Read Replies (1) of 110194
 
politicians always do whatever is necessary to ensure their own survival, which is dependent on people never getting to the point where they become so angry that they take up arms or vote them out of office. as such, you're guaranteed that inflating debt away will always be facilitated when enough of the population is threatened by a large debt crisis.

I think you are spot-on with this view. And it makes me wonder whether the low interest rates on 30 year bonds and mortgages, in addition to the strong showing in the home-building stocks is a rational response to expectations of higher inflation. In other words, is it not rational in this environment to leverage the purchase of commodities like houses with cheap long-term money?

In the past couple of years the carry trade was borrowing short and lending long. Does it now make sense to borrow long and puchase commodities likely to inflate?
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