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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: GST who wrote (71242)10/6/2006 6:05:49 PM
From: mishedlo  Read Replies (1) of 110194
 
The issue is only in focus when you add them all together and look at the long term trend.

In the big sense of the picture the long trend will always be up. 80% of the time we are in a period of inflation. Perhaps a bit higher and perhaps a lot higher depending on how you weight your basket - something you have refused on many occasions to state (or how I look at expansion of credit).

Last I recall however was you dropping the basket approach (something which is impossible to create and even if one could create it, impossible to measure because of genuine quality improvements and new products), in favor of looking at currency prices. Of course the US$ had gone in a tear in both directions throughout history as has the YEN so that model seems hopelessly flawed as well.

Your model (whatever it is) also seems to count things like peak oil as inflation, a big point of contention.

But given that housing is THE single biggest expense for mst people and 69% of the population owns a home, to dismiss hugely plunging home prices is surely erroneous.

You are now dismissing falling home prices, falling restaurant prices, and falling prices on generic drugs. Yes prices will continue to drop regardless of what the dollar does, but I note that my model has called for a stable dollar (at least one that doe not go crashing as you suspect), and for now you are ignoring that.

In other words, in spite of massive data you refuse to even see the possibility that some sort of turn towards deflation has already begun.

Mish
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