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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: I_C_Deadpeople who wrote (86163)9/12/2007 12:27:34 PM
From: Real Man  Read Replies (3) of 110194
 
Yeah, it's a gradual dollar devaluation and monetarization of
debt, just like they have been doing. The only problem is that
the credit bubble needs to pop first, or else the mess will only
get worse. Monetarizing an ongoing credit bubble is like pouring
gasoline on fire. If FCBs start selling their reserves instead of
accumulating them, then the US (and the World) will get into a serious
recession. Granted, there is no way to get out of some serious pain
at this stage, but I guess some monetarization will soften the
blow and prolong the inevitable cleansing. Eventually a
restructuring of the whole economy should be achieved,
turning US from a Ponzi finance
economy back to industrial economy, which is a lengthy process.
Need to rebuild the broken manufacturing base. Was the 70-s
stagflation really that bad?
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