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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Colin H who wrote (23165)12/9/2004 9:17:24 PM
From: glenn_a  Read Replies (1) of 110194
 
Colin H.

That is simply a great article by Prudent Bear's Marshall Auerback (even though it was written Nov 26, 2002), and it remains as relevant as ever IMO.

In particular, the association with fascist economics (i.e. economic cartelization) is quite fascinating here. I particularly like the following quote:

"With the Fed as lender of first resort to the Treasury, the government becomes spender of last resort on private capital equipment and structures, not just public roads, dams, bridges, and unemployment compensation."

That's a perfect prescription for who becomes the ultimate "bag holders" in the current reckless monetary regime - businesses and workers who are not part of a national cartel structure which can maintain pricing power (in part through government preference or largesse) in the event of a collapse in aggregate demand.

So while the Fed continues to extend credit at record levels (as per Russ's post below):

Message 20843501

... I continue to believe the end game involves normalizing interest rates and curtailing monetary debasement of the US$ in response to geopolitical pressure from competing global economic interests (i.e. the "losers" in extreme US$ debasement).

The following recent article re: Japan threatening to sell off its USD reserves is indicative of the monetary fault lines of geopolitical winners and losers who are maneuvoring to not be the "bag holders" of USD old maid cards (as Russ refers to the almighty buck):

fromthewilderness.com

Of course, like so many official statements, it could just be a propaganda cover setting the stage for continual global monetary inflation.

Anyhoo, no matter how you slice it, 2005 should be a fascinating (and dangerous) year for a variety of asset markets.

Regards,
Glenn
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