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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 (5905)	1/23/2004 9:02:14 AM
From: Silver Super Bull	Read Replies (1) \| Respond to of 110194

Russ, RE: "I've been maintaining that the constant focus on "deflation" (blizzards/icebergs), and "inflation" (hurricanes) is too simplistic." Could you see this scenario: inflationary forces pushing costs up, but certain deflationary forces (along with a contraction of easy credit) not allowing companies to totally pass on cost increases: Thus a painful profit squeeze?

To: russwinter who wrote (5905)	1/23/2004 9:09:38 AM
From: gregor_us	Read Replies (2) \| Respond to of 110194

Russ: I suspect that Deflation is the Current Paradigm, and Inflation is the effect of the battle, to fight that paradigm. However, I do not believe we have entered an Inflationary paradigm, yet. Let me explain: the formation and crash of the stock market bubble, in conjunction with the integration of new technology--turned a Deflationary Boom, into a Deflationary Bust. Since that time A.G. became a Deflation Fighter. And he has won part of the battle. He has pushed commodities and stock assets and real estate and services away from the edge, of the Deflationary pit. But the Paradigm he is operating in--that he continues to operate in--is Deflation. Should he win the battle decisively, perhaps then we can return to the Inflationary Paradigm. And I do believe that will happen. In fact, I thought it was about to happen. (I really thought the paradigmatic shift was upon us.) But I now suspect that A.G. will have to fight at least one more large battle--an open battle that everyone can see--with Deflation. Because there is nothing foundational about this "recovery"--because it is exclusively an asset recovery, with punkish effects on the job market, I suspect the deflationary wave is returning to A.G. A rate cut, liquidity pumping, a lower dollar--all the methods currently employed will be re-doubled in effort, by A.G. Do you think the paradigmatic shift has already occurred, from Deflation to Inflation--with no reversion possible, now?