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

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To: John Vosilla who wrote (41099)9/8/2005 9:31:21 AM
From: russwinter  Read Replies (2) of 110194
 
It is odd the bond market rallies even with more stimulation, more deficits, higher costs of doing business and a possible pause in fed tightening. More credit and more spending keeps the ponzi scheme going?

Several aspects are driving it: short covering from offside speculators betting on measured pace increases, FCBs have come to the rescue, probably their version of foreign aid, the Fed has been pumping liquidity and monetizing (price setting). I think we are dangerously close to another big round of inflation, combined with even higher twin deficits (maybe as much 12% of GDP, past Argentina like levels), amazing.
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