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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (50160)1/18/2006 5:24:13 PM
From: GST  Read Replies (1) of 110194
 
<It is not a fact and has already been proven totally false>

What has been proven false is your assessment of deflation in the face of a gaping current account deficit, low savings in the US and a slowing economy -- false in the sense of not passing the basic logic test. The dollar is exactly where it was 5 years ago in relation to the yen and is virtually the same as where it was against the RMB 10 years ago. Use logic instead of shrill bleating to make your point. Pricing power has nothing to do with the value of the dollar. In an open world economy there is no logic to support the contention that a country running a massive current account deficit with a low savings rate will deflate when its consumers run out of debt capacity. Spending will go down, but trillions in debt and the deficits that created the debt live on. It is not so much a question of if as it is a question of when -- and when the dollar tanks, prices for everything we import, including debt, go up.
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