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

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To: Hawkmoon who wrote (99994)	11/28/2008 12:31:02 PM
From: studdog	Read Replies (2) of 110194

Hawkmoon, Enjoyed your post. I was essentially simultaneously posting this on Mish's thread: <<Everywhere one looks economic pundits are calling for inflation/ hyperinflation to soon follow this bout of deflation because of the massive amount of money pumped into the system. Because it seems everyone is calling for this, I am suspicious it will turn out that way. If you look at the amount of wealth (money) destruction that has occurred over the past year, the amount of unsterilized money creation is not that big. In the US there has been over $7 trillion in stock market capitalization loss, and in residential real estate, approximately $5 trillion. I look at my stock portfolio balance as MONEY, and to a lesser extent, view the value of my house in the same way. Add this $12 trillion to the money lost through credit destruction and this is a lot of dough gone pouff. Adding the impact of the reduction in velocity of money I would conclude that deflation is still the threat for some time to come. Gold seems to be signaling the same thing. Gold will be OK but won't perform as well as cash if deflation continues.>> We seem to be on the same page

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