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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (221)	2/19/2004 1:04:44 AM
From: philv	Read Replies (3) \| Respond to of 116555

I don't have a good handle on this, but what if everybody takes the Japanese solution.....print money and buy US treasuries/dollars. No need to manipulate interest rates....just print Yens or Euros or whatever, and buy dollars to lower your currency. The negative consequences are delayed and softer than lowering interest rates. Too simple?

To: mishedlo who wrote (221)	2/19/2004 9:58:16 AM
From: yard_man	Read Replies (1) \| Respond to of 116555

re the conference call with Makin, Shilling and Prechter: Prechter makes a very good observation -- both stock / economy bears and bulls believe in higher rates. Bulls think the pickup in economic activity that is coming will make bondholder require a larger return because of the inflationary implications. Bears think that foreigners sitting on a ton of treasury debt will give up and sell because of currency losses and the continuing decline of US economy. Prechter is right -- there is unanimity there which indicates that rates will head lower, but I think he doesn't "get gold" or precious metals at all. He has taken the superficial position that precious metals are simply an inflation hedge and therefore they will perform poorly in this environment, i.e. under debt deflation. I think what I missed out of the conversation was that any of the participants really had a good feel for where the world was headed and especially capital flows -- resulting social impact -- I don't have the answers -- just like to hear others ruminate more broadly. I think one thing Prechter misses is how activist government will really be here under debt deflation and all the participants put too much weight on government numbers.