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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (35721)	8/22/2005 9:25:44 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

BC we agree about 1, 2, and 6. We disagree about 8 and 5. #3 is a wildcard but I tend to agree with you over the long haul. You will eventually be correct about 5 but I think the long haul there is much longer than I think you do. Copper falling by 45% and staying there for say 6 years or longer would not surprise me at all for example. Oil is unlikely to do so. As for real estate inflation, one has to look ahead not behind. The FED created this mess and will have to suffer the consequences of dropping interest rates to 1%. The next time we see that figure (and I think we may), it will not have the same stimulus. I do think we see lower lows in the 10-yr yield. I confidently predict 2.5%-3.0% Bonds are not bonds. There is an enormous bubble in junk bonds and no bubble at all in treasuries IMO. Mish

To: Perspective who wrote (35721)	8/23/2005 9:49:23 AM
From: Lee Lichterman III	Read Replies (3) \| Respond to of 116555

RE: >>I think the whole "flation" debate is overrated. Let's be specific, here. Most of us are worried about individual asset pricing, not the "general" level of prices. What most want to know is what will happen to the prices of: 1. houses 2. stocks 3. oil 4. gold 5. other commodities 6. manufactured goods 7. bonds 8. services << Actually I am more interested in teh "flation" debate for the purpose of DEBT. If we are going to inflate or hyperinflate, then one would be best off to go out and go into debt up to their eyeballs so they can pay off that debt with cheaper dollars later. If we are going to deflate, then one wants to hoard dollars, be debt free and wait to snatch up all the defaults and cheap goods down the road. Being wrong about the flation debate could prove disastrous. I am debt free right now and am starting to feel "left out" because I didn't rack up 4 mortgages and buy homes to flip out here in Calif where I could have doubled the value of those homes and made ultra high returns on my money, via taking on debt leverage. Imagine if 10 years from now, all the sheeple prove to be correct in having a zero savings rate and huge debt because Helicopter Ben dropped the money from the sky so to speak and all that debt went away. I think I read that the entire debt of Germany after their hyperinflation was only worth about a nickel in the end. I would gladly buy physical assets on credit to the tune of billions and pay you a nickel later. -ggg- On the other hand, if we deflate, I will gladly pay you a nickel later in the middle of the massive defaults to own an entire city or thousands of acres. -ggg- Get it right and the kids could be set up for life. The debt question is IMO more important than anything else. Good Luck, Lee