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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: bond_bubble who wrote (69398)9/6/2006 2:13:00 PM
From: mishedlo  Read Replies (1) of 110194
 
The "New Deal" was actually making the deflation worse by creating "pseudo inflation". Today, I think, the world is entrenched with the view that, govt should be extremely interventionist and ONLY because of that I think commodities will go up in price!! If Chindians wanted better life, they better work hard for it. Instead, they will all expect their govt to "intervene" hard for them.

Read that first sentence and understand it.
Because I agree and it is exactly waht the Fed did when they created a housing bubble.

I do not think "pseudo inflation" is the correct term as the inflation was very very real. What is correct (or at least I think will be correct) is than it created a fake K-Cycle spring.

Given that there was no debt purge of malinvestments, that new debt is going to money heaven - on top of the old debt that is going to money heaven. There is a lot of debt that is owed but will never be paid.

There is no pool of real funding (savings), and no way to pay this back.

Wages rose today. Big deal. Wages are a lagging indicator and it took 4 years for them to rise. Wages may be rising but Russ showed showed Tax Receipts are falling. Fewer people must be employed for that to make much sense.

Wages rising is too little too late to make much difference compared to what a slowdown in housing will do to the economy.

Mish
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