The Epic American Credit and Bond Bubble Laboratory Message Board

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

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To: GST who wrote (91138)	2/2/2008 7:55:47 AM
From: Rarebird	Read Replies (2) of 110194

<<I think that the global economy will surprise to the upside almost as much as the US will surprise on the downside>> I do not subscribe to the view that the global economy will somehow DECOUPLE from the United States. The emerging Asian economies are still heavily dependent on exports as a source of growth. The recent stock market low (1257 on the S@P 500 intraday, on the day after Martin Luther King Day) was a result of a massive liquidation of billions of dollars' worth of stocks which had been accumulated by a single trader at French bank Societe Generale. This cleaned out all resting sell stop orders dating back to early 2007, clearing the market and establishing a short term low. That low will be retested and most likely be broken to the downside. I say this because even cyclical bear markets show a minimum decline of 20%. Furthermore, I do not see how the Fed rate cuts will immediately improve the depressed real estate market. The main beneficiary of this manic easing by the Fed will be Gold, the next asset bubble. A year from now, I see tremendous inflation, very high bond yields and soaring Gold Prices.

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