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

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To: Tommaso who wrote (90719)	1/23/2008 11:09:13 AM
From: John Pitera	Read Replies (1) of 110194

Hi Tommasso, An excellent Post. I agree with your thinking very much. I believe the US went back onto the gold standard in 1879. in 1919-1920 we had inflation rates that rivaled what we saw in 1979-80 and we had interest rates kick up to over 16% I believe a few rate benchmarkets got to 19% or so. I have mentioned several times that there is no political will for a deflationary contraction of any magnitude to occur, thus inflate we must. It's the Mandate, and is politically expedient. In the 70's the cry in the agricultural pits was *Beans in the teens* we got up very close to there recently and this time we should be able to vault up through there. If we look at live cattle and Hog prices they have sold off considerably the last few months. I anticipate that to mean that with feed costs being as high and looking to go higher the commercials are finding it short term more profitable to harvest the animals and it's depressing prices near term. The back side of this should be seeing those prices go up due to smaller herds that are carried forward. John

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