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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: kris b who wrote (75333)12/11/2006 8:04:10 PM
From: mishedlo  Read Replies (1) of 110194
 
Mike, could you please explain how will FED get money/credit to the consumers (Deposit directly into private accounts? Everybody will stop working and wait for the next welfare cheque from the FED) and how will FED force the people who are already broke and sinking financially to spend that money. They might decide to pay their debts down instead.

So far liquidity pumping by FED since June just isn't working. The juice isn't flowing where they want it to flow. Pig man are sucking it all, while J6P is starving financially, down to 20 days of funds on transactional balance. It is easy to print but hard to get it to the economy through the channels that need it the most.

Thanks

Bingo
We have theory and we have practice.
It will take Congressional action to do what Mike expects.
Bear in mind that is not impossible, it is merely unlikely.
God knows what the next Congress will do.
Also note what a complete pullout in Iraq (also not impossible) might do do to military expenditures.
Also note what the next Congress might do to allowing cheaper drugs to come in from Canada.
Also note that Bush might start a war in Iran in the meantime.
Also note that at any time Congress might pass another "Smoot-Hawley" act.
etc etc etc

Those are more reasons we have theory and we have practice.

All we can do IMO is be aware of the longer term trends as to what debt means and will ultimately do while in the meantime not getting killed by total blowouts in the shorter term.

If ANY of us could successfully predict the short term, we would be retired long ago and not bothering to post here.

Mish
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