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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Little Joe who wrote (11437)	5/18/2004 11:41:45 AM
From: isopatch	Read Replies (2) \| Respond to of 108763

Hi Joe. During the 70s oil crisis, we saw negative real rates along the entire spectrum of fixed income. martincapital.com As you can easily see by comparing the left side of the lower chart with the recent years at the right side, the FED has only managed to drive real rates down in the very ST maturities it directly controls. Without negative real interest rates in maturities from 2 to 20 yrs we're not going to ignite an inflation cycle. In fact, FED policy is barely keeping deflation at bay till after the election. In an economy completely overwhelmed by decades of excessive credit creation the above is an extremely important factor among others that are in place to bring about a major secular deflation. The inability of the inflationist camp to integrate the above into their analysis is a fatal flaw in their case. Isopatch