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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 (36718)	7/22/2005 8:22:28 PM
From: Oblomov	Read Replies (1) \| Respond to of 110194

I agree; I am positioned to benefit from such a move. Note that the Anglo-American alliance (US-UK-Aus) is raising rates while the rest of the developed world is neutral or accomodative. There is a (not always friendly) game of chess being played between CBs. But many dollar bears are not seeing the US trade deficit for the gambit that it is. The trade deficit will ironically shrink as rates rise. And in not so many years the USD will begin to catch the tailwinds from the demographic bust that will hit Europe, Japan, and China, barring some unexpected turn of events. And so, we are wise to make friends with India, Africa, and South America. This said, I expect the USD to pull back for a while before resuming a long term march upward. I think the credit bubble is about to be deflated. The Fed may actually be able to engineer a non-abrupt contraction of credit, though I would not be surprised if a few blowups occurred now and then. I envision a future of tighter credit, and higher yield spreads. The question marks on inflation/deflation are oil and housing prices, and the US savings rate. I think that the savings rate will rise much more than people think possible in the coming years. JMHO.