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

To: ild who wrote (16080)	7/1/2004 3:55:01 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Thu Jul 01 2004 14:01 trotsky (frustrated, 13:45) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved exactly - and it's an excellent reason. real wage growth is at a multi decade low right now, and the one thing that's truly in oversupply in this world is clearly labor, so there's little chance of a change in compensation trends. also, as Pyrite has alluded to, the housing bubble is very likely close to its demise. i personally believe it will eventually become the worst case of asset price deflation ( in terms of its effects, not in terms of percentage price decline ) since the early 30's stock market crash bear. not only will that be perceived as a major deflationary event, it is liable to actually help shrink the money supply by destroying some of the outstanding credit. the Fed will of course try to counter it with a Japan style government debt monetization orgy combined with 'zero bound' rates, but as i always say, the market is a bigger force than the government interventionists, even if they themselves are stupid and arrogant enough to believe otherwise.