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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 (29870)	4/2/2005 9:40:43 AM
From: russwinter	Read Replies (2) \| Respond to of 110194

Doug Noland's interview with Kate Welling is an absolute must read, an extraordinary matrix of the Bubble issues: prudentbear.com Where I'm at though, is with this post 12/09/04 more restrained liquidity theory I've been running with. By "more restained" I don't mean tight, but at the margin it's been toned down. It's like having the accelerator down to the floor at 100 mph in a car unsuited for high speed driving in heavy rain, and then suddenly tapping the brakes, so that the car starts into a skid, and recovery, another tap, a skid, etc. Does anybody care to debate this issue with me, it's an important one? Bring your facts and data. I'll be around two more weeks, then I will be largely gone for over three weeks, going to Turkey, and can't spend much time in internet cafes there. From Noland: Too much liquidity is a sign of the problem. Why did NASDAQ spike up like it did? Because of wild liquidity excesses. You always have wild liquidity excesses when you have this kind of monetary disorder. So why did NASDAQ collapse? NASDAQ collapsed because it went into a melt-up mode. When you create all this liquidity and prices spike up, eventually they reach a tipping point and reverse—and then liquidity collapses (). Right now, wherever you look, you see liquidity. But you are also seeing global asset inflation and speculation. Which means that this thing is going to require continuous injections of liquidity now, to keep this thing levitated. But that’s the danger. Right now, the system can, and does, create enough liquidity to keep everything up. But how long can this go on? It’s already at the point now, where huge amounts of liquidity have to be created, because asset inflation has gone global; market bubbles have gone global. () ()This could happen in two ways, a meltdown which collapses the urge to speculate, or an attempt by the Wizards to reign in liquidity, before a meltdown, that causes a meltdown. I'm toying with the later now, but it's day by day. (*) Despite the frantic Pig Men speculative borrowing of late, I don't think enough fresh liquidity is being created to support multiple Bubbles of this size. Message 21190976 That's why you see quick fades now in these ramps and rallies.