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

To: ild who wrote (42321)	9/26/2005 12:34:37 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Mon Sep 26 2005 11:57 trotsky (erratum) ID#248269: 'aasets'='assets' Date: Mon Sep 26 2005 11:57 trotsky (strat, 10:31) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved "" As I have repeatedly said, this can go on for a long time. Yes, we added $600 billion in debt to foreigners. But total US assets also rose more than that." while i agree that 'this can go on for a long time' and probably will go on longer than most people think, i must take issue with this 'but US aasets also rose' statement. it should be clear that if prices on US assets ( like e.g. houses ) rise on account of a speculative bubble, these 'gains' are ephemeral - they're phantom wealth. on the other hand, the debts will remain in place once the phantom wealth evaporates, so this 'balance sheet exercise' ( which is also a favorite plaything of types like Kudlow and various Federal Reserve bureaucrats ) is really pointless.