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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (53997)2/16/2006 12:16:30 PM
From: John Vosilla  Read Replies (1) of 110194
 
"A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services... "He says the US$ is in a bubble but will not say why.He implies inflation is rampant but will not describe his measure or his basket of goods or services"

My simplistic view is inflation, or loss of purchasing power of your dollar, is rampant if you live in a bubble market and need to pay for services you need to live that haven't been exported. Dollar bubble is due to the record twin deficits that have never been at this level relative to GDP all in the face of still low long term interest rates due to a world awash with too many dollars from our trade deficit. We all know this can't continue. We can't really debate the end game without agreeing on where we are today.

In your world of Danville inflation appears very low and the coastal housing bubble sparks a credit contraction and deflation. Perhaps if you took a trip to the big cities you'd see how strong the economy is and how less dependent the real economy is on the coastal housing and consumer credit bubbles. If the stock market doesn't have a real collapse this summer or fall the market will have spoken that the end game is not deflation..
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