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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Tommaso who wrote (27867)3/5/2005 6:31:13 AM
From: unrealistic_thoughts  Read Replies (1) of 110194
 
>> Except for the anomaly of Japan, with its pathological addiction to excess saving, deflation is no longer possible. <<

There is nothing pathological about earning a guaranteed real return of 3+% and getting taxed on only 1/3 of your gross earnings.

if you have 1% interest rates and 2% deflation rate that is exactly what is happening in Japan right now. under those circumstances i'll buy all the bonds for sale with every spare penny i've got. when the government (actually federal reserve) screws up the economy in this way it also tends to drain investment and real returns from the stock market because bond returns are so darned attractive.

when and if the USA goes into a deflationary spiral, people who are debt free will be offered these wonderful investment opportunities. people who are debt laden will pay the devil (e.g. Greenspan) with their soul. deflation : coming to a federal reserve branch near you in 2006 : it's not just for the japanese any more !!!
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