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

To: mishedlo who wrote (1922)	3/12/2004 11:56:42 PM
From: Mike McFarland	Read Replies (2) \| Respond to of 116555

Individuals will service their debt by simply reducing consumption. Five years from now, you are not going to see people turning in their five year old vehicles for new. And five years from now, I should think that the US will have to pay a lot more than 4% to sell bonds worldwide. Now how this all fits together with a weakening dollar, commodity prices...even that rather confusing bit (confusing to me at least) about the bank of Japan buying treasuries and the repatriation of profits...I assume this is one of those problems that requires several variables and several differential equations to solve. Say, if I had a million dollar account, their would be some smart broker showing me economic simulations on his PC, right <g>. I grew up in the stagflation of the 1970s, when my folks did well to save and save more, putting it into increasingly higher paying Certificates of Deposit. Perhaps the answer is on this thread, and maybe I have read it and it is not sticking--but that is where I see that we are going again. Thanks for the response--clearly I do not yet fully understand your argument. Of course mine is pretty simple--high debt equals higher rates. A huge 'deflationary mess', well, that is tough to imagine isn't it. But then, maybe the real estate market and stock and bond markets are all peaked right now, and Monday is one of those black mondays. Who can say?