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

To: yard_man who wrote (3943)	12/27/2003 9:33:49 PM
From: Joan Osland Graffius	Respond to of 110194

tippet, I have been trying to think through the K cycle and made a conjecture that we must experience a monetary deflationary period before we can have monetary inflation. In other words do we have a law of economics that the misallocation of capital that occurred during 1996 through 2000 must be destroyed before monetary expansion can occur.

To: yard_man who wrote (3943)	12/28/2003 3:23:14 AM
From: Haim R. Branisteanu	Respond to of 110194

The issue of forecasting economic developments is like forecasting the weather and it is getting more difficult by the day. I would agree that it is helpful to maintain an open mind on the “K” cycle observation but between that and predicting the inevitable based on “K” cycles is a big stretch. My point is that the economic environment has changed dramatically during the last 25 years and abandoning the gold standard and reliance on fiat money generated by CB’s around the world poses unknown dangers or possible solutions. The human factor has also changed as the life longevity has increased at the same time that the velocity of money has increased substantialy and transformation of raw material into goods has shrunk substantially. Once you bought a house for life now the dynamic of modern life changed that – same with almost each item we use which is defined as durable goods, not to mention clothing. The only thing that remained constant is food and food production even that corn grows now a bit faster and hormones can accelerate maturing of cattle sheep and poultry. All those factors bring new dimension to the economic cycle which can not be back tested IMHO.