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

To: Rational who wrote (19588)	12/27/2004 1:15:26 PM
From: Rational	Respond to of 116555

The excessive money created everywhere will have to eventually sink by negative real rates of interest because consumers (the minions everywhere) cannot support usurious interest rates as well as inflated prices of basic necessities. Countries are competitively creating money to keep their exports humming. The excessive money mainly held by a few will shrink and the Central banks will be forced to think of the minions instead of creating fiat money in the private accounts of exporters. Now euro will likely be created massively to maintain export potentials of European countries.

To: Rational who wrote (19588)	12/27/2004 1:15:41 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

I have said all along that low interest rates will continue due to excessive creation of money everywhere, and that the virtually inflated dollar will continue to fall in relation rest of global currencies, and that American real estate prices will continue to rise. Japan lowered interest rates to zero and expanded money supply to boot as well. The YEN also fell vs the US$ form much of the time Japanese real estate was falling, 18 years and counting. Why should the US behave any differently? You keep saying that houses will keep rising while affordability drops (unless you maintain wages are going to start heading back up). I strongly disagree that housing prices will keep rising as affordability drops. You ignore debt levels, property taxes, falling real wages, and all time low savings rates. It is a theory with no cohesive logical reason behind it if one looks at ALL the facts rather than just one or two. Mish