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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (12641)	4/26/2004 12:08:05 PM
From: russwinter	Read Replies (3) \| Respond to of 110194

<is it hard to guess that the Fed will pick Door Number 1?> I think it's pretty much the consensus that they "tighten lite", and even I buy into that. But the fact that the dance floor is pretty crowded with the "tightening lite" crowd, definitely concerns me. But even if they end up tightening more aggressively, I think it's too late, they are now largely irrelevant. The three primary events that are unfolding, and in no particular order (or perhaps all at once)are: Train Wreck I (inflationary shortages, and bottlenecks), Train Wreck II (consumer falls out of bed, mostly because of higher subsistence costs, and a little more difficulty borrowing to pay for it), Train Wreck III (an inflationary panic in the debt/bond securities markets). Right now the Treasury market has bought a little time, because the financing requirements are down for a couple months. But starting in July (), there will be over $50 million a month in new debt Treasury fundings required. The BOJ will have to be back very aggressively, and I just don't see them doing the $50 billion a month deal again, they've shot their wad. ()Until then, I'm calling the period between now and July 4th, the "Train Wreck killing fields".

To: Wyätt Gwyön who wrote (12641)	4/26/2004 11:01:04 PM
From: Jim Willie CB	Respond to of 110194

Fed still regards inflation as commodity without location this is their micro-error they believe all inflation works to cancel out deflation truly mindless and wholly incorrect to a tragic degree they have no concept of monetary inflation's deflationary impact either long-term or immediately (like with new debts added) costs are seeing inflation wages are not pricing power is still not there China will give us pricing power when they enforce it soon I remember the mid-1990's and the car mfg price struggles when the Asians raised prices on their cars, instead of enjoying a price advantage, US car makers pushed prices up the same thing will happen on the opposite side China will raise prices of their vast exports to USA that will allow US mfrs operating domestically to raise prices but only accordingly, as per China hikes / jim