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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: SouthFloridaGuy who wrote (75349)2/27/2008 8:14:26 PM
From: stockfiend  Read Replies (2) of 116555
 
How can memories be so short?

Does anybody not remember the 'criticism' of Volcker in the early 1980's when he started increasing rates amidst a recessed economy? If not, I suggest you do a Google search of pundits screaming about recession and job losses.

Like him or hate him, he was right because in the late 1980's and 1990's inflation expectations came crashing down. In 2002 we were discussing 'deflation'.

The SAME thing will happen this time as well except this time the discussion will last a helluva lot longer. Probably starts in earnest within the next 6-12 months with inflation expectations spiraling out of control, along with commodities prices and global growth. Outside the stock market, the greatest short right now is deflation expectations.

The bond market is not stupid and it's certainly smarter than anybody on this board - including you and me. The bond investors are smart enough to get in front of standing treasury buy orders from countries frantically trying to recycle their imported dollars to ward of dollar-pegged domestic inflation. Rather than fighting the trend, I'd rather listen to it.

For all the commodities bubble blowers, the future always seems clearest at the end.
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