Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: yard_man who wrote (2330)	11/18/2003 2:42:27 PM
From: ild	Read Replies (2) \| Respond to of 110194

Date: Tue Nov 18 2003 14:33 trotsky (kapex, 11:15) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved missing the point? i'm firmly in the deflation camp, and the continuing shrinkage in commercial&industrial loans, the continued relative strength of the bond market and lately the first significant drop in money supply in over a decade all appear to nod in agreement. i agree that the rise in commodity prices is a side-effect of previous monetary inflation which has stoked the boom in China, but there are also structural reasons as very little investment in production capacities has taken place over the past two decades. China meanwhile has a certain life of its own, and once the boom there turns to bust, the commodity price inflation will no doubt end as well - but that could take a while yet, since too many people are busy warning us about the coming bust. that's a bit like Prechter during the late 90's stock market bubble - people tend to underestimate the durability of such booms. nevertheless, China's boom actually contributes to the deflationary era as well, due to the fact that enormous production capacities are added to the world's already brimming pool of same. obviously no Western country is able to compete unless there's a dramatic overhaul of the current tax and regulatory structure - so prices for consumer goods will continue to be under pressure. it's certainly unlikely that we will see 30's style price falls, but a few quarters of negative CPI should surprise no-one. Japan is the model.