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

To: orkrious who wrote (23541)	12/18/2004 9:23:26 AM
From: SOROS	Respond to of 110194

It seems all the "experts" always quote "historical" patterns for what they now "expect" to happen. I may be WAY too elementary here, but I don't believe they have taken a good look at the debt charts and how it has been expanding exponentially and how close it is to imploding the entire "system" they rely so heavily on to "predict" their expectations. When the interest on the debt at every level (from Mr. Sheep Consumer to Mr. Moronic Government) tips that ONE PENNY too high, the party is over. On a personal level it means bankruptcy, and on a national level it means get used to a lower (MUCH lower) standard of living and other PAINFUL economic and daily living changes. I suppose most people (based on the replies in this forum and the current economists and government financial advisors) do not believe that the debt is really a reality or they cannot read a chart correctly, or they have not mastered the fine art of addition and multiplication, or (and this is my top choice), they are NOT positioned to benefit from a debt collapse and so have blinders on regarding this possibility, or (I like this one equally as well) they have been behaving economically retarded for so long and are so used to living beyond their means that the thought of doing anything responsible that might lower that standard of living is unthinkable and even more painful than death --- easy to see this from the individuals continuing to use credit cards and refinance options that don't merely reduce their debt payments but allow them to accumulate MORE debt and MORE things to the government continuing to spend for programs that WE can't afford and offer breaks to others and take bribes for this behavior because it keeps them in first-class accommodations and elite living status wherever they go. Perhaps I can't see the tree for the forest, but I have a good suspicion that in this case, the "historical" cliche is on my side. I remain, SOROS (still focusing on the forest and not the trees)

To: orkrious who wrote (23541)	12/18/2004 9:37:33 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

This is an extraordinary and important article, and the positioning right now in the rate COTs, supports this statement. Message 20867793 Appears there is a liquidity contraction gradually developing. The CBs have been MIA since 12/8: Message 20864411 In any financial disturbance, the sensible money goes straight to liquidity, which in the past has always been gold or short-term Treasury bills in the senior currency. I was absolutely startled earlier in the year to learn that other senior central banks and Japan were buying U.S. Treasuries as far out as 10 years, because that suggested they were speculating rather than positioning for reserves. What can happen is that the Bank of Japan could start selling the longer Treasuries, but at the same time it might also be buying shorter-dated Treasuries. So the effect on the dollar would be negligible, but it sure as hell would steepen the yield curve.