Mish's Global Economic Trend Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: John Vosilla who wrote (20002)	12/31/2004 7:44:08 AM
From: SouthFloridaGuy	Read Replies (1) of 116555

I think that would still be expansionary though (read: stagflation). You would probably need short-rates at the same level or higher than long rates in such a situation. The thing is that is almost counter-intuitive to the deflation argument because we'd be exactly where we started from in 2000, with the Fed having the flexibility to cut over 400 basis points in your example and more in mine. Still enough to delay the inevitable. I'm more of a believer in Mish's bond prognosis. The Fed will continue to raise the short-end as stagflationary pressures manifest, the yield curve continues to flatten because the long bond won't budge, much to everybody's shock. Then you get a scenario that is faced by Britain and to a lesser extent Australia today.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next