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

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To: Little Joe who wrote (89059)10/24/2008 1:17:04 PM
From: Elroy Jetson  Read Replies (1) of 116555
 
Let's assume we've so far experienced $60 trillion in losses globally.

Let's assume we've seen perhaps $12 trillion of these losses temporarily monetized.

This leaves us $48 trillion in monetization short of getting price levels back to those of two years ago.

If you want inflationary prices, you're going to have to overshoot. But you'd best do it quickly as the losses continue to grow.

Inflation will occur if and when monetization schemes occur after the market has bottomed. Funding infrastructure projects to create jobs in an environment of 15% unemployment and idle steel mills will not be inflationary. Funding more spending than allowed by capacity constraints, such as after the economy has begun to recover, would be.
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