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

To: russwinter who wrote (3212)	12/11/2003 4:36:50 PM
From: yard_man	Read Replies (1) \| Respond to of 110194

>>We will see in a few months if Heinz is right about an input pullback here, but it sure won't happen because of excess supply. << to be fair -- I think his pt was credit contraction <=> money supply contraction => price drops or deflation. Certainly, you can see this in the future for housing, no?? demand and credit growth are intimately coupled at this pt, no?? I'm not sure, but I think he sees this as something that is more than a correction as you imply, but an overwhelming force at some pt which takes years to resolve. I certainly do... While the public may have been sold on deflation -- using silly price indexes -- the whole attempt was so that CBs could inflate without anyone questioning them. No one really believes that the Fed can't inflate us back to ... some increased amount of economic activity -- better economic health. If I were to worry about a consensus view being wrong -- that would be it -- that the Fed can simply reflate us back to some decent level of economic activity. Like it or not -- slowing in the growth of credit means that some contraction in, at least, relative prices is going to take place somewhere ... I suspect it will be in housing and will spread from there to other kinds of "financial assets" ... Foodstuffs, evergy, will probably go up for a good while --heck, I am betting on it ...

To: russwinter who wrote (3212)	12/11/2003 4:40:37 PM
From: yard_man	Read Replies (1) \| Respond to of 110194

how low would yields have to go OR for how long would the low yields we have now -- have to persist before you gave up this manipulation talk?? ... I think it is silly to talk about manipulation of the market for treasuries. The market is too big -- can they yank things this way or that for a day?? maybe, by a nice statement here or there, but manipulate for weeks on end?? -- no way. I can find hundreds of posts going back to '99 talking about how US bonds were going to blow up and we were going to get whacked with high rates ... maybe it is time to look at the markets for what they are and why this hasn't happened when the buck broke 1.10, 1.00, .90 ...