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

To: mishedlo who wrote (19814)	12/29/2004 1:06:27 PM
From: John Vosilla	Respond to of 116555

<The long bond is signaling economic weakness IMO, no more no less. When this "fake boom" dies, yields are going to PLUNGE from here, not rise. If you have a choice of believing a simple explanation or some conspiracy theories, it is probably best to accept the simple explanation.> I personally do not dismiss a depression or serious deflationary downturn as out of the question. More plausible to me is a back up in long term rate even in the face of some weakness given my belief true CPI is in the 7-10% range and some holders of all that debt will wake up to that belief as well as the twin deficits soon. Once the backup in yields starts taking down most asset classes and consumer confidence plummets. Then foreigners stop funding our deficits, long rates rise even more and the cleansing of the debt truly begins then we have our depression/deflation. Perhaps the true answer to your belief lies in many depressed midwest markets near you which from the look of things makes your scenario very possible if they are a leading indicator for the urban coastal regions?