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

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To: bond_bubble who wrote (51407)	1/25/2006 5:42:18 PM
From: GraceZ	Read Replies (1) of 110194

My whole argument is that money inflation by Fed has created an environment where investing in US is costly, loss-making venture. It's not all the Fed that made the US less efficient. Monopoly labor made demands in excess of gains in productivity and the Fed accommodated those demands in the 1970s and early 1980s. Most of the last 20+ years or so of disinflation involves us recovering from that grievous error. Now some people are more worried about deflation than inflation and this speaks volumes. Ofcourse, in your opinion, Warren Buffet is not smart enough when he chooses not to invest in US market and instead hold most of it in cash!! Warren is probably more heavily invested in US assets than any other single living individual. Ofcourse I'm not comfortable investing in China. Adam Smith pointed out centuries ago that individuals have a clear home bias, they want to invest close to home, they want to keep a close eye on their "stock". Still here in the US we own an amount that equals 50% of the GDP in foreign assets, both in FDI and equities. This is of course an extremely small amount in comparison to the amount of assets we own that are dollar denominated and located right here in the US. at the same time you are supportive of govt printing that makes enterprising impossible at this stage of monetary inflation..... Ridiculous. We are recovering from a capital spending binge in the late 1990s. Since C&I has finally recovered from it's three year plunge and is headed up strongly, this can only mean US companies see good prospects in the near term. I'm looking for public US corporations or start up that can print US Treasuries like the GSEs. The GSEs printing US Treasuries....now that's funny! Do you even have an inkling of how it is that the mortgage market works?

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