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

To: John Vosilla who wrote (30421)	4/12/2005 12:52:40 PM
From: pogohere	Respond to of 110194

I agree. When the debtor's income is insufficient to finance the debt undertaken, his credit collapses. If, system wide, debtors find themselves in this position, the system collapses and deflation ensues. This transpires without regard to the nominal interest rates, exchange rates, commodity prices, housing inventory, current account balances, trade balances, etc. This is the key lesson I note from Duncan's "The Dollar Crisis." So watch income. If income does not increase sufficient to finance the debts incurred, it's game, set , match.