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

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To: bond_bubble who wrote (59081)4/22/2006 12:07:21 PM
From: UncleBigs  Read Replies (3) of 110194
 
bb, I agree with you. We are in a false prosperity right now. The credit bubble will burst and with it, demand for just about everything will evaporate.

I expect nearly everything to fall in price as a supply glut forms.

What we don't know is how the Fed responds. Bernanke has talked about helicopter money. We'll see. I don't think the Fed has all that much flexibility to lower rates and try to gun the economy higher.

He'll probably try to thread the needle. Keep rates as low as possible without crashing the dollar and without crashing the bubbles in housing and stocks. Good luck. I don't believe such an outcome is possible.
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