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

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To: Rarebird who wrote (65770)7/10/2006 11:26:50 PM
From: John Vosilla  Read Replies (1) of 110194
 
'Simultaneously, lower yields reinforce inflation, since low real rates encourage investment in real assets such as commodities.'

Guy on the radio today was talking about higher rates also being inflationary due to higher costs of capital that need to be passed through by the business incurring the added cost. You both are right to some degree so persistently higher asset values (that plateau after being artificially juiced upward in a steep yield curve) coupled with a persistent rise in cost of capital is the most inflationary of all over time..
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