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

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To: Real Man who wrote (76191)12/20/2006 1:24:12 PM
From: Mike Johnston  Read Replies (2) of 110194
 
I think it is mostly the bond market that has a pinned look.

Stocks are rising, because of all the new money being created around the world, negative interest rates and higher prices charged by corporations being reflected in higher revenues and profits.

Stock market benefits from inflation, stocks are hurt by inflation only to the extent that inflation tends to increase bond yields which in turn puts pressure on stock prices.

If the Fed monetizes the bond market preventing interest rates from rising,the most likely outcome will be hyperinflation since rates will become progressively more negative.
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