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

To: Crimson Ghost who wrote (22702)	2/2/2005 5:04:20 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

I agree that inflation is considerably higher than BLS says, but not yet close to double digit. Probably 4-5% versus the official rate of 3% or so. But the sky will be the limit when the Asians move to rein in their vendor financing. I see this is a religion with you. ggg #1) what makes you think China and Japan will stop buying treasuries? Did you not read my article on China? #2) what makes you think other foreign money will not pick up where they left off #3) What makes you think there will not be demand for treasuries in the US, WHEN not if our economy slows No one has answered those questions yet. Finally, IF you get what you expect what pray tell will stop a worldwide financial crisis with the world plunging into a depression? If the answer to that is nothing, then that is all the more reason for Japan and China to continue is it not? Thus we come to the likely conclusion that Greenspan will just keep hiking his merry way until housing collapses. When it does, US demand for treasuries will likely be robust. Yes, there are other possibilities as I admitted today. I am repeating the most likely one. No one has come up with a rational basis for any other scenario, just a religious belief that deflation can not happen here, and that China and Japan will stop financing us, and that there will be no demand for US treasuries when they do, and that the the world will flock to the YEN and Euro as pathetic as they are. I am sorry Your RELIGION requires an enormous parlay of things to happen while mine requires Greenspan hiking until housing sinks which will destroy money and credit. Now, tell me again why your god is better than mine. State the case please for your parlay of things vs mine. Mish