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

To: Wyätt Gwyön who wrote (44834)	11/5/2005 8:31:21 PM
From: mishedlo	Read Replies (2) \| Respond to of 110194

I can not guarantee anything. I believe the liklihood is that bonds have not peaked. No one can guarantee much of anything other than they will eventually die. Here is a post that expresses my thoughts that I made just a couple days ago on another board.... Debt is an ENORMOUS problem. In fact it is THE problem. Once the system is unable to service the interest on that debt the whole ponzi scheme blows up. That is the key idea. That event will NOT in any way shape or form be an inflationary happening. That is what hyperinflationists refuse to see. Now the question is: are we there yet? We will be there once housing implodes. Right now it seems they can hold the other pieces together. Note that printing money and dropping it from helicopters can not help. It would bail out debtors at the expense of creditors. Is Congress or the FED going to allow that? We passed laws like the bankruptcy reform act trying to make people debt slaves forever. I do not believe that can possibly work. People can't pay what they do not have. Not writing off bad Japanese bank loans is one of the things that kept Japan in deflation for years. Now we are attemping to prevent the writeoff of bad consumer debt. Perhaps that will hamper us for years to come. As I said, the party can continue as long as housing is strong. After that inflation does not have much of a chance IMO. Mish I am quite confident of that Greg. What I am less confident of is how we get there. Is it possible every bond bull gets wiped out first? Yes, I just strongly doubt it. Mish