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

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To: Umunhum who wrote (39724)8/25/2005 1:10:27 PM
From: bond_bubble  Read Replies (2) of 110194
 
What you DONT understand is that, if oil prices increases the other spending falls!!! You are stupidly assuming that people will spend all the money on oil AND also spend on ALL other items that they are currently buying!! That is not the reality (unless wage increases). In reality, they will stop spending on ipods, tvs, cars, movies etc. and hence those prices will fall - there will be deflation in those items because oil prices went up (ofcourse there is inflation in oil but deflation in movie tickets, cars, tvs, ipods etc - So, net, is it inflation or deflation) - If you still dont understand, let me know which part you dont understand.
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