To: Silver Super Bull who wrote (25979 ) 2/9/2005 2:45:41 PM From: Jim Willie CB Read Replies (1) | Respond to on battle of titans: inflation vs deflationgold-eagle.com They impede its operation, acceleration, and pathway. Added household debts act like low octane, if not dirty, gasoline which the engine cannot efficiently process into pure speed. Higher across the board material and energy costs act like so many bricks placed on the backseat and trunk, weighing it down. Stalled worker wages act like a shortening of the driver's leg, whose foot finds difficulty to keep constant pedal pressure. Foreign central bank interventions to block Asian currency exchange rate upward adjustments, as discussed above, act like a slipped transmission, the clutch unable to shift into the next gear. Federal Reserve interventions to forestall higher long-term interest rates and to monetize mortgage agency debt act like forewarned removal of debris from the roadway just over the horizon, sure to lead the driver to greater caution. The upcoming stall in housing prices will act like a powerful stiff headwind which the race car must fight against. Big hedge fund losses remove billions from the speculation, and commodity markets specifically, acting like a clogged air filter to inhibit air supply for gasoline combustion. Economic recession acts like the turbocharge switch turned off, since available money to push demand across the entire system would be absent. Money supply cutbacks as measured by the Fed, not so much from miscalculation as from a general report card on debt birth & default death, new business creation & failure, act like severe weather warnings which might order all cars off the road.
