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

To: russwinter who wrote (2082)	3/15/2004 1:47:36 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 116555

Russ, you make a great deal of sense but you seem to miss on the realities of rising production costs and household costs, and their effects in both the immediate term and the near term sure, prices are rising everywhere but outsourcing is a byproduct of Fed reflation but incomes are not but pricing power is totally nonexistent but Asian goods accelerate in imports but CB's are subsidizing our TBonds you have no factors whatsoever to dismiss the deflationary outcomes in progress, nor justification to label it as Orwellian logic IT IS PURE & SIMPLE INTERVENTIONIST CONTROLLED OUTCOMES this bullshit will barrel us down squarely into the Liquidity Trap as long as CB's intervene, we become just like Japan and will follow the JAPAN PATH with failed real estate sector, failed banking sector when CB's back out, we follow the ARGENTINA PATH then and only then, will you prevail with higher interest rates CB's and Chindia are screwing with your entire otherwise correct logical flow next up is a stall in residential real estate not from rising mortgage rates, but from poor incomes this will add to the stress assisting deflation you talk about industry shutdowns I agree, shortages will lead to defaults and interrupted supply but how can you consistently arrive at the opposite conclusion to what is unfolding? take your argument to exaggerated levels suppose half of all industries shut down what will happen to worker income, spending, pricing power? it will decline sharply will that interrupt the flow of Asian finished goods? no so no money to run the economy, while imports continue to flow in that does not point to higher interest rates you seem to be calling the 9th inning on the radio but we are still playing the middle innings / jim