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

To: Box-By-The-Riviera™ who wrote (44823)	11/5/2005 7:55:53 PM
From: mishedlo	Respond to of 110194

The Fed could stop raising rates right now and this bubble will burst on its own. Another 2 or 3 hikes should be the final nails in the coffin. However, it won't be easy for Bernanke to fight this by going "unconventional". While you can create electronic money and buy stock futures with a few clicks of the keyboard, you can't buy liquify the housing market like that. "Buy now or be left behind" is turning into "sell now or watch your gains evaporate". That change in psychology won't be easy to reverse. The only thing that will support housing is a return to ultra low interest rates. However, that will likely result in raging inflation and a cratering dollar. The Fed has cooked its own goose this time. I see no plausible way out of this mess without a big disaster. I don't see the U.S. economy making it through 2007 without a major financial crisis. I concur buy bonds. LOL Again I concur. Mish