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

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To: John Vosilla who wrote (66819)7/25/2006 1:54:40 PM
From: Mike Johnston  Read Replies (1) of 110194
 
We might get only a stagflationary recession, as you say, but that would be the best case scenario. It assumes that people will passively continue to be fooled and pounded with bogus CPI, a slow dollar leak instead of the crash, and no shock coming out of Asia.

The other scenarios are deflationary depression/hyperinflation, the matter of debate being which occurs first.
With millions Joe Publics having hocked their houses to the bank in excess of what those houses are worth, the big question is how far the Fed will go to bail them out.

The magnitude of such bailout might be much bigger than 2001-2003 bailout. Each subsequent bailout must be bigger, because the imbalances get bigger each time.
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