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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: bond_bubble who wrote (58992)4/21/2006 2:24:58 PM
From: John Vosilla  Read Replies (1) of 110194
 
"Many people think house speculators are idiots but commodity speculators are genius because commodity demand is genuine!! Even if statistics show differently!! Bottom line - we are getting into the terminal stage of boom where everything inflates madly causing PPI to soar and companies start laying off people. The only way companies can stop that is if PPI falls. So, interest rates are going to go up irrespective of deflation/credit bubble bust. Even if there is deflation in credit, PPI is going to be high for sometime because of currency depreciation. People hoping for Bernanke helicopter are going to surprised that a) inspite of housing crash, credit bust, bank bust and b) inspite of elevated interest rates (i.e helicopter Ben hibernates) - PPI stays relatively high (I dont expect double digit for example). This will be like UK in 1929...."

Sounds convincing. I do agree on the higher interest rates, much higher PPI, credit bubble bust and regional housing bust. Show me signs where the banks or corporate America is going bust? Eternal doom and gloom is as silly as bubbleheads speculating and flipping way over priced property today or speculators in gold and silver in 1980. In your scenario the only good investment this next cycle would be to hoard basic goods?
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