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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (37354)7/31/2005 12:53:41 PM
From: russwinter  Read Replies (3) of 110194
 
98% of the people see inflation. 2% of us see deflation.>

Beg to differ again, 98% see Bubbles they can borrow and speculate on, all the while just poo-pooing the resulting serious inflation as "no big deal". That's because as you somewhat correctly say, they have a vested in interest in Bubbles (more so than inflation). That's Fillmore's (and my) Bubble Mr. Creosote enabling theory. This works by waiting for more weak economic numbers, then smiling gleefully, waiting (usually not too long) for more money printing (the Helicoptor Ben bogus monetarist approach), borrow, and speculate even more. Then you end up with a ludicrious situation where so much capital has been misallocated, that you have 1-2% cap rates on rentals, that's if they are lucky enough t ofind a renter. That's a completely different psychology from what you typically describe. My rather repetitive term for it: the Land of Oz.

I really feel this constant focus on deflation, and the simplistic K wave theories that go with it clouds and fogs the real issue. If you would substitute the word Bust (a different and more accurate term) for deflation, we would be on the same page, and then we can track it, see the response to it, and how the chips fall.
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