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

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To: John Vosilla who wrote (78889)2/12/2007 12:26:36 PM
From: Mike Johnston  Read Replies (1) of 110194
 
Grow money in double digits with huge fiscal deficits and generational lows in interest rates to boot and obviously things will be rosy..

This sounds like a free lunch, i have no idea how long can that continue.

If it continues long enough maybe everything will be fine, the problem is, if it continues too long then we might be entering an area where people lose their faith and flee fiat money. That is why i am very bullish on gold. Should something like this happen gold will soar into thousands.

How long will Asians keep recycling the trade deficit ?
Or if housing were to suffer significant collapse, the trade deficit would disappear due to decline in consumer spending and Asians would have nothing to recycle ?

It will be interesting to watch.
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