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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (3538)	9/5/2003 11:38:34 AM
From: zonder	Read Replies (1) \| Respond to of 4907

I would be very interested to hear why he thinks deflation is a threat at this point. In the past five months, CPI has been 2.1-3.0% while PPI floated at 2.4-4.2%. That is inflation, not deflation. And, in all likelihood, they ain't getting any lower. Not with the liquidity in the market soaring like there's no tomorrow. Take a look at this and tell me if this leaves any chance to deflation: research.stlouisfed.org Exodus from US stocks I have no problem with. It is entirely possible in the event of these clowns succeeding beyond their wildest dreams in debasing the currency. Exodus from all USD denominated instruments will then be very possible. In that case, however, yields will go through the roof. In short, there is no deflation, and there never was. There is no risk of deflation except in the "pro-forma inflation" figure of the Fed (i.e. "core inflation") designed to look low so they can try to justify the low interest rates they are imposing on the US economy in order to contain the credit bubble. Needless to say, real interest rates are hence negative, and have been for quite a while, and that is generally not a good idea as it provides a twisted incentive for high-risk investments, but hey, I guess we'll cross that bridge when we come to it.