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

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To: mishedlo who wrote (53439)2/10/2006 8:33:53 PM
From: FiveFour  Read Replies (1) of 110194
 
<<These are very simple questions. >>

These are not simple Yes/No questions. for example, take the first question:
<<1) When the FED increases money supply for a prolonged duration do you expect prices of goods, services or assets to in general rise?>>

There is no way to know if prices will increase or not because of the variables involved:
- what is the rate of growth of money supply
- what is the rate of growth of gdp
- what is the rate of growth of taxes
- what is the rate of growth of trade deficit
- what is the rate of growth of inventories
- what is the rate of growth of savings
- what is the change in consumer sentiment
- etc, etc, etc.

Try putting that in a model, there is lots of grey area. Yes or No answer? You might as well flip a coin.
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