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

To: Umunhum who wrote (37960)	8/6/2005 1:01:16 AM
From: mishedlo	Read Replies (1) \| Respond to of 110194

I have addressed that question at least a dozen times. Obviously you can not read. At any rate, it's not worth arguing about it. Don't have the time. Mish

To: Umunhum who wrote (37960)	8/6/2005 9:03:34 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

Japan's government didn't have a huge deficit that required foreign funding > The Japanese have a govt debt of 150% of GDP, almost twice that of the US. You are correct that they don't depend on foreigners, but that's because they basically monetize it. That's has been a big part of the global Bubble. <The US Government would have to start printing like crazy, interest rates would skyrocket and the Dollar would die.> This will be the event to watch for. The overall debt is so big that they can't possibly monetize all of it, that's why I expect credit spreads to blow out. However, the Fed may focus on keeping the Treasury market intact through massive intervention and monetization. That combined with a flight to safety could keep shorter Treasury yields in check at least in the early phases of a credit revulsion. You are correct about the foreigners though, they may end up being the bond and credit vigilantes on this. If they panic, look out, it will be manifested by a Treasury market collapse along side a USD collapse. That prospect might keep the Wizards in check in regards to the printing presses? Unlikely, but we will have to see.

To: Umunhum who wrote (37960)	8/6/2005 3:48:17 PM
From: John Vosilla	Respond to of 110194

"There is only one way out of this mess and that is to devalue the dollar. And to think that interest rates are going to go down while the US Government devalues the dollar is crazy." Sure seems that way. Perhaps combined with a stagflationary rolling depression, collapse of overvalued coastal housing and other overvalued assets back to reasonable multiples to cash flow with a persistent rise in inflation, interest rates, wages, and rents. Major stock market indexes range bound for the rest of the decade but new bubbles and opportunities under the surface.