The Epic American Credit and Bond Bubble Laboratory Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: mishedlo who wrote (49497)	1/12/2006 10:55:45 AM
From: mishedlo	Read Replies (1) of 110194

Heinz offered this opinion on those 10 points: one should perhaps add that while the Fed is certain to fight a deflationary credit collapse by monetizing government debt, thus maintaining a slightly positive skew to money supply growth, this will be overwhelmed by the commercial bank credit shrinkage. a lot of credit creation in modern times is OUTSIDE of the Fed's purview (see e.g. the GSE's and the entire securitization enchilada). corporations will be forced to enhance their productivity by any means at their disposal, which is a long term positive, but will combine with negative private sector growth to produce FALLING PRICES in spite of continued money supply growth. malinvestment liquidation will also liquidate the other side of the ledger (the credit that supported the malinvestments), but the state will continue to create MORE malinvestment (a la Japan), thus delaying the liquidation process considerably. this means that the period of falling prices for goods and assets could last a very long time.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next