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

To: russwinter who wrote (3761)	4/6/2004 9:11:48 PM
From: gregor_us	Read Replies (1) \| Respond to of 116555

Russ: Investors Will Try the Familiar Safe Haven of Treasuries first. This reaction may only last a very, very short time. But they will try. We are humans and we always return first to what has worked in the past. "A man returns again and again to his mistakes, the way a dog returns to its vomit..." McHugh: (at Safe Haven.com) The Bottom Line: All roads lead to deflation. Whether we travel there now or follow the scenic route of hyperinflation that leads to a dollar collapse that leads to a bond collapse that leads to a stock market collapse that leads to economic collapse that leads to deflation, we cannot be sure. The actions of the Federal Reserve clearly show they prefer winding lanes and trees and streams, anything to postpone the inevitable. Sadly, the longer that correction is delayed, the worse it will be. Deflation will hurt more from loftier price levels than from here because with liquidity-driven bubble expansion comes everburgeoning debt loads, because M-3 growth - liquidity - is a function of lending/borrowing.**