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

To: valueminded who wrote (6610)	5/18/2004 11:44:13 AM
From: yard_man	Respond to of 116555

I hate to say this Chris (I know where you are coming from), but I gotta say it: p . e . r . f . e . c . t !

To: valueminded who wrote (6610)	5/18/2004 1:45:05 PM
From: ild	Read Replies (2) \| Respond to of 116555

Chris, what about deflation in assets? We depend on asset bubbles. US economy would be devastated if RE and stocks were to drop considerably. This threat causes Greenjeans to hold FED funds at low levels which in turn creates more speculation (read bubbles).

To: valueminded who wrote (6610)	5/18/2004 3:37:13 PM
From: Peter Joseph	Read Replies (2) \| Respond to of 116555

Hi Chris, Re: Deflation is a virtually impossible endgame when consumers spend. What if consumers get to the tipping point where they cannot borrow any more? Even with ultra-low (lower than today's) interest rates. Even with predatory lending (ads on Christian radio stations on how you can unleash the power of wealth using RE leverage). Re: So I have a difficult time seeing deflation as likely. It's not here yet. What we now have is hyperinflation. The popular theory goes that this precedes deflation. i still believe it. No country has printed (inflated) it's way out of economic malaise. Think Argentina.

To: valueminded who wrote (6610)	5/18/2004 4:11:11 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 116555

<<Japan is completely different. They save. We don't.>> Good thing (for them) They did....and we will, but only after a lot of people learn the same lesson their great grandparents did. Wealth is not created or preserved at the cutting edge of a printing press....if it were, no South American country would have ever had a recession! To put it in the words of Harpo (AKA, "Abbie Joseph Cohen"), the US economy is a supertanker...it takes a looooong time to sink. EDIT: I DO agree with you on general consumer prices....but this will be a different kind of deflation than most people are used to....deflation of assets (which ARE the economy, unfortunately). All the stuff people need to live on will skyrocket in price, leading to a double whammy of sorts on the standard of living. Higher prices, lower income, lower asset values. Everyone will owe more, everything will cost more and there will be few avenues of escape for even the most sophisticated investors. Commodities may be one out, and gold may be another, but dollars, bonds (with the POSSIBLE exception of T-bonds if things get bad enough) and stocks will be toast. Al "Soylent" Green-span has cast the die, and the rest of us have crapped out!