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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (30203)	4/8/2005 2:12:36 PM
From: NOW	Read Replies (2) \| Respond to of 110194

"In 1999, I came down on the side of inflation as the likely outcome of the U.S. reflation efforts that were certain to follow the 1990s stock market bubble. I thought so for the following simple reason: the Fed and the U.S. government cannot allow millions of indebted households, corporations, and the U.S. government itself to go bankrupt, and a liquidity crisis can quickly develop into a solvency crisis. This was a central tenet of something I dubbed "Ka-Poom Theory," and it is even more true today than it was in 1999, as the monetary and fiscal stimuli applied to counter the deflationary forces unleashed by the stock market crash of 2000 are far stronger today. When this bubble declines, the solvency of U.S. homeowners will be maintained at any cost, even if that cost is a condition of severe inflation." this is just naieve at best. To imagine that the outcome depends on political will to bail folks out is just silly