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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (2245)	11/16/2003 6:24:52 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

also, the end-user inflation that we see is mainly in services, and if you look at a place like Japan, their deflation started with goods and took half a decade to wend its way into services. we are following the path of Japan. Nothing can stop it IMO other that the writeoff of bas debt. Greenspan is trying to get consumers to take on more debt and that IMO is reckless. To top it off Bush is passing legislation to make it harder for consumers to write off debt in bankruptcies and thus we have credit card companies pushing credit down everyones throat and many are taking it. All those excesses MUST be purged and we have not even started the process!!!! That process of making debt worthless is very deflationary. Guaranteed. One might think it could be "inflated away" But.... not when we are losing jobs left and right to India and China. That macro trend will not stop until it is fully played out. Businesses are not going to increase capex either in a world awash with overcapacity. Thus the only logical conclusion in spite of all the PPI noise, hype about interest rates needing to be hiked to "stop inflation" is that deflationary forces are simply too powerful to be overcome and throwing all this liquidity at the problem only serves one totally useless and frightening purpose: getting Bush re-elected. Mish