Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Mike McFarland who wrote (1913)	3/12/2004 11:22:01 PM
From: gregor_us	Respond to of 116555

Mike McFarland: It's Not so Much Advocacy of Lower interest rates that I am talking about--but rather, an inexorable pull towards lower rates. Sure, lower rates have been the policy from Washington--but these have been in primary response to the wheel of global deflation. It didn't work. We're pretty much getting the same result Japan got, with roughly the same policy response. Now that the economy is headed back into Recession, the policy makers will redouble their efforts. The efforts are causing inflationary pressures. Those pressure are real--and seem "bad" to many people. However, IMO, those inflationary pressure are temporary. They stand in the shadow of the Mighty Debt Mountain, and Global Capacity. Cheers.

To: Mike McFarland who wrote (1913)	3/12/2004 11:24:54 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

You will have to help out the newbie here, but what is the point of driving rates toward zero? This is too easy. The only way people can service this debt is if rates stay low. This debt is a ticking time bomb and if rates are hiked there will be a debt implosion. Is this inflationary? If you ask Russ or nearly anonyone on the BBB they will point out the PPI or the CRB and think you are nuts for asking. If you ask me it is hugely deflationary. Why? Because we have no jobs is why. Debt keeps piling up but income does not keep up. No jobs = no inflation. The PPI has not produced a meaningful rise in the price of things. Higher oil prices acts as a tax. More money spent on oil and ga and NG = less money spent on goods. Rest assured if you want a different answer just go to the BBB and you will get a far differnt one. As far as I am concerned, the lower yields in treasuries says I am right, Russ will tell you its just a bigger bubble. What is a big bubble is the stock market and the collapse of that will be a huge deflationary mess. A collapse in housing would be even bigger. Mish