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

To: mishedlo who wrote (10047)	7/30/2004 3:21:48 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 116555

mish, It's even worse than that. Govt. borrowing is one thing. But, in the past, when the govt. borrowed a lot, it squeezed out borrowing by the consumer and corporations. This time around, Easy Al has been so accomodative that the corporations and consumers are also drowning in debt, along with the govt. The only way to get out of the situation is quick, vicious inflation, but the Fed has not been able to generate that, for some reason. Deflation would be death on a stick in this scenario and we usually get the worst of all worlds when we are reckless. But I believe we will get the inflation first and the deflation after.