Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: mishedlo who wrote (39789)	8/25/2005 6:10:10 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

credit and money and fake wealth goes up in smoke?> Yes, that's what's going to materialize, and of course the US economy will unravel. At the same time many, if not most of the holders of Eurodollars will bail out of those instruments, causing a massive rate spike. All the junk, MBS, ABS will rate spike and much will default. Confidence in the US and it's currency will be shattered. Tax receipts to pay government debt will collapse. If the Fed tries to monetize it to cover their tracks, then it will get worse. That's my expectation, but I'm not totally dogmatic. If on the otherhand the whole Greenspan fiasco is exposed for what it is, a sham, and Paul Volcker comes out of retirement and declares, "no more money printing.", then at least the USD complete rout and hyperinflation could be averted. You will then get price stability and pockets of deflation, certainly in crowded credit areas like housing. Essentially the economy will clear, and that would be very healthy in the long run, although it won't feel that way for people who climbed out on ledges. But you know, Humpty and Bully have partied long enough, so tough shit I say, start doing the responsible thing and quit lining the pockets of speculators and wild men. That's exactly what happened in Germany in about 1925-26. They just stopped the printing presses, confidence in money was restored, and they endured a Depression, which they were in anyway. They were dead either way, but inflation was cured, and at least they had a sound currency. I don't see that happening in the initial stages of the Bust though. We will know if it does though, just follow what the Wiazrds do, not what they say. Right now they blast, every time VIX upticks a point. Watch if Bush appoints Bernanke, that'll seal it for a huge hyperinflation.