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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 (7536)	2/10/2004 10:03:26 AM
From: Jim Willie CB	Respond to of 110194

I think the Good Dr pointed out that in order for the capital to migrate from the speculative sectors to the real economy sectors, massive selling & buying must take place when that happens, the inflated speculative paper will fall in price to such an extent that the overly tilted spec economy will falter from shrinking capital flows I think you have a missing piece in the thesis simply stated, what happens to the economy when the following assets decline in price from your migration... - housing - trez bonds - mortgage bonds - stocks (esp shit stocks) ??? I believe you get a recession, with declining demand for all the commodities and final demand goods which will keep real economy prices subdued when I had my week in Cannes, he talked endlessly about how the imbalance, distortion, and permanent changes in the US Economy render it unfixable without a depression but also that the incredible skew toward speculative financial sectors and debt-driven consumption, make it impossible to use much of any recognizable pathways from the spec to the real economy all the pathways that you require run through Asia !!! thus, in order for you to get your result, it must happen via Asian imports so, watch the consumer electronics world, and watch WalMart your thesis depends upon a direct pathway for capital it aint there I believe the inflation we both expect will come thru the back door from the completed cycle of exported inflation during 1980's and 1990's, finally coming home to roost by the way, the other half of that Asian imported completed cycle is Treasury Bond disincentive higher bond yields from reduced supply bond illiquidity, which KR cites or implies / jim