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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 (37051)	7/26/2005 9:39:32 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 110194

Don't be a wuss. As for Volker, yes he would have prevented this housing bubble for sure. His medicine is hardly the cure right now. Imagine 7% interets rates. Instant depression? There is no other solution. As Jospeh Schumpeter said, "Policy does not allow a choice between depression and no depression, but between depression now and a worse depression later." .

To: mishedlo who wrote (37051)	7/26/2005 10:14:57 PM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

"As for Volker, yes he would have prevented this housing bubble for sure. His medicine is hardly the cure right now. Imagine 7% interets rates. Instant depression?" Perhaps coastal housing values would be 30-40% lower but the dollar would be 30-40% higher and the stock market about where it is today. Would we be better off as a country that way?

To: mishedlo who wrote (37051)	7/26/2005 10:53:07 PM
From: Crimson Ghost	Respond to of 110194

Mish: A litle humility please. A few years ago you argued that Greenspan would never hike rates again. Do not be too sure of your deflation religion. Asset deflation certainly. But CPI deflation or money supply contraction. Chances about one in a hundred IMHO because the buck will PLUNGE once the Fed stops tightening.

To: mishedlo who wrote (37051)	7/26/2005 10:59:48 PM
From: Mike Johnston	Read Replies (3) \| Respond to of 110194

Imagine 7% interets rates. Instant depression? What would be wrong with that ? Much better to have an instant depression now than a depression of twice the magnitude 2 years from now. And if the Fed raised rates to 7%, yes that would be painful, but at least it would ensure that the country would not need 14 % rates 2 years from now. And the country would survive 7% rates, just as it did survive 15 % rates with Volcker, who despite death threats did the right thing and paved the way for prosperity of the 80's.