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To: mishedlo who wrote (272740)	1/6/2004 2:01:06 AM
From: Simba	Respond to of 436258

Mish, I agree with you about the liquidity due to enormous monetary and fiscal stimulus going into stocks but in the end this will feed into price inflation of goods. Already a lot of the liquidity has gone into housing and inflated it into a bubble. Greenspan and Bernanke want exactly that and they think they have achieved this goal already. They have an inflation target that they want the core CPI to reach. Meanwhile they don't care where all the liquidity flows (equity, housing) as they know finally it will end up in the price of common goods. The commodities/gold although influenced by China are going up due to this expected future inflation in common goods whether it be due to a fall in dollar and/or the excess liquidity from the credit inflation. There is a tiny chance that all this can simulataneously or in a cascading way deflate in a "prechter" style but I think this has to happen inspite of all the efforts by Wall steet, Fed, Bush, foreign Feds etc. It looks like only die-hard bears are hoping for a deflationary end to these bubbles. Only time will tell. Regards, Simba