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

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To: KyrosL who wrote (87988)	10/26/2007 6:31:17 PM
From: GST	Read Replies (2) of 110194

<but they definitely do not contribute to inflation yet> Wow -- I guess you do not drive or eat or wear clothing or have medical insurance -- etc., etc. As for the dollar and housing - both are heading downhill fast -- but to date the dollar has been on a much steeper and deeper decline. The decline of the dollar and the decline of house prices are joined at the hip as they are mediated to some degree by the cost of shorting one versus the other -- I take no comfort in knowing that one is going down faster than the other. By making it cheaper to short the dollar in a vain attempt to prop up housing asset prices, the Fed has added to the international run on the dollar and has had little or no impact on house prices. If the Fed decides to send the dollar plunging even more steeply then it is possible that house prices denominated in dollars could go up in relation to the dollar. But for now they are both headed south -- and that spells inflation in the extreme. As oil approaches 100 per barrel, and as our deficits soar into the stratosphere, it must be nice to live some place as you do where there is little inflation. When did you leave the USA?

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