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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: KyrosL who wrote (87990)10/26/2007 7:04:07 PM
From: GST  Read Replies (3) of 110194
 
The long bond is not a special inflation indicator -- it is an indicator of the price of renting dollars. There are a ton of dollars for rent -- and they are cheap to rent because there are so many of them. Everybody has them -- tons of them. And recently people started to get rid of them -- it is called the foreign exchange market. It is in the foreign exchange market that you see inflation -- and it is soaring like a rocket. The worst fears have not yet come to pass -- after all, oil is "only" $90 a barrel. If the dollar's plunge continues to accelerate, you will be hard pressed to find many Americans who can keep up with the cost of filling their tanks, and you certainly won't meet many Americans in Europe as the Euro heads for 2 to 1. As for eating -- better do it now, because as the dollar plunges you are going to have to go on a diet. The longbond? The longbond reflects a world awash in dollars, and a world awash in dollars means the US is awash in inflation.
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