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

To: Elroy Jetson who wrote (32806)	5/19/2005 6:47:34 PM
From: TobagoJack	Read Replies (1) \| Respond to of 110194

Elroy Jetson, That space buggy does not motivate. Must rethink premise: <<price inflation in China, and asset inflation here in the US. But this is a distinction without a difference. ... Remove the credit and one is a temporary as the other>> Yes and no, but not quite. Afterwards one has imploded homes and looted pensions on the one side, and smart infrastructure, motivated workers on the other, plus 300-years worth of catch-up domestic demand not yet enabled with consumer credit. And so, a BIG DIFFERENCE. <<The new money creates uneconomic investments which would not otherwise be made>> ... is a matter of interpretation and pricing, as the guy who made it gurgle downward into the abyss, and the man who buys it out of distress levitate to moolag nirvana. <<... he called China a house of cards which has built far more factories, infrastructure, and everything than they will be able to use in the next five to ten years>> ... Chinese typically do not think in terms of 5-10 years, which simply has the feel of a few months out here. The real estate friend ought to become a lawyer, for he lacks imagination. <<It seems likely that China's program has brought capital destruction to their nation as well>> ... yeup, capital destruction, resulting in mucho construction, ala USA 1880s-1920s, financed by J6P with homes and credit cards, enabled by Sake2Bottles with trade surplus and bubbles. The formulae works and equation balances. <<which will lower their standard of living>> ... if frugal savings, diligent work, manic capital investment, enthusiastic learning, scientific reform, and systemic transformation will result in standard of living decline, then let it be so ;0) Myths are nice, in that their explosion will be entertaining. Chugs, J

To: Elroy Jetson who wrote (32806)	5/20/2005 2:14:32 PM
From: Jim Willie CB	Respond to of 110194

agreed, but will they unwind it all? doubtful instead, market forces will attempt to unwind it while the govt agents forestall it my forecast is for longterm Treasury bonds to converge with Japan at around 3.0%, maybe 2.8% because most inflationary machinery devices have been turned inside out to produce nonproductive debt on our side and oversupply on their side both USA and Asia are aiding secular deflation unwittingly US inflationary machinery has produced falling prices in a boomerang those falling prices include retail goods and domestic wages you still dont address how remarkably our monetary engines have produced both lower retail product prices (from China) and lower US job wages whether you see it or not in its time-lagged effect, still unsure but honestly, Elroy, I dont care whether you see it or not it is part of the conundrum in bonds those who still believe in sharply rising LT rates dont get it they will get some life when China revalues which will see an effect in CPI from imports already, textile quotas and export taxes will raise clothing prices across our numerous Big Box retail chains the Chinese export tax is brilliant it is a "trade war tax" paid by American shoppers to China / jim