Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (74980)	2/21/2008 7:55:21 AM
From: Real Man	Read Replies (2) of 116555

Treasuries sold off substantially. Commodities are running wild. Fed 125bp. cut has led to wheat virtually doubling in a month, and many other commodities skying (Pt., Pd, etc.). Inflation - defined as CPI - is running wild, and will continue running wild as long as the Fed keeps rates well below even doctored CPI. In fact, if these policies continue, real inflation could exceed 20% this year. This won't stop until the Fed raises rates enough to contain inflation. Treasuries will melt down. It seems very wrong to bet on deflation when the Fed has been keeping rates well below CPI for the past 20-some years, ever since AG came. Real CPI is now north of 12%. The US government is a lot more insolvent than banks, North of 50 Trillion GAAP, due to huge SS and medicare liabilities. Why in the World would anyone invest in treasuries?

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