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

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To: bond_bubble who wrote (69381)	9/6/2006 9:57:56 AM
From: mishedlo	Read Replies (2) of 110194

I'm not sure, why you are so dogmatic that credit deflation in housing, stocks and bonds necessarily mean all prices and wages fall. Credit is not neutral. i.e in a credit deflation, some prices fall and some prices rise. You are of the opinion that we are in excess in all sector of the economy (i.e money is neutral). We are not in excess for example in commodities sector. I am not dogmatic about falling commodity prices at all. Oil is irrelevant to my equation and so is copper and so is gold. In fact prices of most anything do not matter under my definition. People keep pointing to oil as inflation, and I say it is not. Thanks for the article though. Oil prices soaring in the 30's is proof of my argument. That said, I do expect prices of steel to drop, perhaps grain prices rise but I am not sure why (I think there are better ways to produce ethanol), but as far as I am concerned oil is irrelevant to the discussion about inflation. By the way, it is also possible that wages rise (on average), assuming of course one does not count unemployed - a segment that I think soars. Mish

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