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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ild who wrote (72194)10/17/2006 1:29:15 PM
From: orkrious  Read Replies (3) of 110194
 
@PPI -- trotsky, 10:22:54 10/17/06 Tue
while the so-called 'core' PPI seemingly accelerates with the reported 0.6% rate, we're officially now in headline PPI deflation at an astonishing rate (-1.3%), a phenomenon that has recently been in evidence around the world. in fact, recent 'inflation' data out of Europe are indicating that large parts of Europe are close to experiencing outright 'price deflation' (iow, falling prices)on BOTH the headline and core data. it is highly amusing to watch central bankers prance around in their hawk suits as prices begin their plunge and economic activity is slowing down markedly. this is basically the same situation that pertained in the summer/fall of 2001, when they thought the only thing they should worry about in the face of the developing Nasdaq crash was - you guessed it - 'inflation'. we have the proof in writing in the form of Fed minutes - which prove beyond a shadow of doubt that these bureaucrats are as clueless as they come.
the US residential housing bubble's demise is on the verge of becoming a system-threatening horror-show imo, even though there is an inexplicable urge by all and sundry to call a bottom. the current mainstream consensus that it either 'won't matter' (a.k.a. the soft landing fable), or that the bust has bottomed out already underestimates the importance of the housing cycle to economic performance in recent years (a typical credit-inflation induced mini crack-up boom) and misjudges the inertia of such cycles. as this is a relatively illiquid market (compared to say, stocks), trends tend to drag on and on.
you can begin to count the days until the phrase 'unwelcome fall in inflation' makes a comeback.
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