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

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To: orkrious who wrote (38096)	8/8/2005 10:53:16 AM
From: philv	Read Replies (2) of 110194

The banks would rather see inflation than deflation in my opinion. Deflation risks defaults, and the loss is total. Inflation implies individuals and businesses have more money to spend, so how can that be a bad thing for the banks? Other than a few short periods of recession, I have seen nothing but inflation in my lifetime. The system is comfortable with inflation, but dreads the opposite. The trick is to achieve inflation without debt, and to achieve wage inflation to support that debt. We are experiencing asset inflation, (real estate and commodities), but with ever increasing debt and no real wage inflation for underlying support. That is the problem as I see it.

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