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

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To: UncleBigs who wrote (46854)12/9/2005 4:00:00 AM
From: mishedlo  Read Replies (1) of 110194
 
we agree on more things than not, and yes liquidity is fueling many things. But one thing it should not be fueling is the US$.

Something is out of wack.
Now I know the reasons for the US$ to rise, (rising interest rates), but a housing crunch will put and end to this mess soon.

I do not think it will stop gold from rising, except perhaps initially.

I do not believe gold is rising solely because of liquidity either. The FED has not gotten in 12 hikes and a 13th is to come yet only recently has gold blasted off.

Meanwhile what has the stock market done?
It is actually barely up for the year in spite of perma bulls everywhere you look except on a few boards like this one.

I would say liquidity has tightened a lot and I have seen Austrian money supply numbers that would prove it (but they are a few weeks old now).

A more plausible explanation is bubble psychology has taken hold of everything and will draw in every last fence sitter.

If the FED is not scared half to death they should be, becasue this can easily reverse on a dime, and probably will too. A global crash is now likely.

Mish
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