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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Cathedra who wrote (37647)	1/19/2000 12:41:00 PM
From: pater tenebrarum	Respond to of 99985

well, the immediate implication of an inverted yield curve is that it's a warning sign of an impending recession. i am still undecided if the first setback the economy will suffer since 1990 will resolve in the form of stagflation or deflation a la Japan and China. the best argument for deflation seems to be the incredible mountain of debt built up by households and corporations. however, the U.S. has a massive trade and current account deficit, and no propensity to save. add to that a central bank that prints like mad at the merest hint of trouble, and the stagflation argument gains some credence... as to debt, currently a cool 10 billion dollars in ST debt that needs to be rolled over every six months or so is outstanding. that's not only the highest ever in absolute terms, but also relative to the (overstated due to hedonic pricing) GDP. it's a disaster-in-waiting.