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

To: mishedlo who wrote (36330)	7/19/2005 3:56:50 PM
From: GST	Read Replies (1) \| Respond to of 110194

<Hardly anyone understands the deflationary affects of a housing bust.> You have been extremely helpful at explaining them, although I continue to be concerned that we will have an interference pattern from the current account deficit that is not fully accounted for in a deflationary scenario. Nor do I think you take seriously the pace at which China has come on board, and the powerful internal demand that seems to be kicking in there (without I hope being naive about the extent to which China is a global "export platform" vulnerable to a crash in consumer demand from the US). On the whole, I feel I have learned a great deal about deflationary forces in a housing bust from your posts - many thanks.

To: mishedlo who wrote (36330)	7/19/2005 4:26:35 PM
From: loantech	Read Replies (1) \| Respond to of 110194

Mish I think you are a long term gold bull but if we get the deflation and other commodities crash I think gold would go into the dumper too???

To: mishedlo who wrote (36330)	7/19/2005 11:42:13 PM
From: Umunhum	Read Replies (1) \| Respond to of 110194

How come no one can look ahead? You look at the current UNSUSTAINABLE path, realize it is unsustainable, yet project commodity prices out into the future as if it is sustainable. Let's look ahead with your scenario. Do you think the Federal Government will take in more or less tax revenue with deflation? Do you think they will cut spending? Who is going to finance this growing deficit? How are we going to pay for the 11 million barrels per day of oil that we import? The only way the dollar could survive is if interest rates keep going up. If the dollar doesn't survive, what should you be holding? What if things just keep chugging along? Remember these things tend to last longer than anybody would believe. Then what should you hold? Oil is a special case because of peak oil concerns, but a $20 haircut from these levels would not surprise me a bit. Nor would $80 oil either although I think we see 42 before we see 80. I'd take that bet. I don't think we will ever see 42 again.