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

To: mishedlo who wrote (7198)	2/7/2004 11:38:26 AM
From: studdog	Read Replies (1) \| Respond to of 110194

Very nice post and one that reflects much of my thinking (making the post suspect?). I am trying to position myself for a coming (continuing) boom in commodities that will not lead to much in the way of inflation for goods, but will crimp profits. The rise in commodities will offset cheap labor and increased productivity, impairing a company's ability to grow profits but not necessarily cause a profit decline. The resulting lack of inflation for goods will keep interest rates down, confounding the consensus looking for a rise. Under this scenario I would expect a flat to down stock market ( maybe a small goose up before elections), US treasuries being a safe bet for yield with a small upside in price, Euro treasuries being particularly attractive, and commodities being the most attractive asset class of all. Emerging markets, I think, still have some upside but not as much as last year. Of course after the election cycle, all bets are off and I believe that we have to pay the piper, the s.. will hit the fan etc, etc. I would appreciate all criticisms and comments concerning these thoughts. Karl