The Epic American Credit and Bond Bubble Laboratory Message Board

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

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To: russwinter who wrote (50753)	1/22/2006 4:20:08 PM
From: mishedlo	Read Replies (1) of 110194

You need to make a distinction here. When the credit revulsion occurs in the ABS+MBS=hedgies leveraged plays, capital will blow out of those, and the value of those securities will go to money heaven. If the hedgies are leveraged into commodities those price will blow up as well. So you could see capital and fictitious values destroyed. If the monetary authorities try to print money to buy those distressed securities, it may end up going into new unexpected places, and not at all where they want it. Like goods or just plain cash? Damn are we in agreement on more and more stuff. Money going to credit heaven is going to cause a huge revaluation in all kinds of assets. It could easily downward spiral. Bingo on where the money goes to if the FED tries to intervene. It might go into gold or silver and not into housing. The worst possible scenario for them IMO. "into cash" Wow Russ that is the mish delfation scenario 100%. Of course you want to see it first but you are outlining the deflation scenario today in spades. Mish

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