The Epic American Credit and Bond Bubble Laboratory Message Board

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

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To: Tommaso who wrote (33195)	5/25/2005 8:56:01 PM
From: el_gaviero	Read Replies (2) of 110194

Good answer to my post, especially this: <<Prechter is constructing a perfectly absurd argument that says that inflation is really deflation because the prices of long term bonds fall.>> For years I have thought that inflation was inevitable for political reasons. But discussion on these boards has loosened up my mind a bit, and now I think that there might be a case for deflation. Trouble is, I don't have a clear story to tell myself concerning what it might be. Sure, you can say that in a time of economic difficulty large numbers go bankrupt, and send their debt to money heaven, the result of which is that money gets subtracted out of the system, and there is deflation. But I don't understand why the FED can't just buy up bad debt, or at least enough of it to prevent serious loss of purchasing media within the system.

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