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

To: mishedlo who wrote (47029)	12/11/2005 7:38:03 PM
From: kris b	Respond to of 110194

This is a tough one. I have two scenarios: We go into a garden variety recession yields go down. We have a Great Depression/credit market meltdown, where liquidity shrinks faster then the aggregate demand for it rates go up. Simple law of supply and demand, and fear I should add, as there will be a huge risk premium in case of a Big One. Hyper inflating out of depression will not work. All Fed board members read a book by Bresciani-Turoni “The economics of inflation; a study of currency depreciation in post-war Germany”. Unless they are suicidal, they will not put printing presses into an overdrive. Hyper inflation destroys both lenders and borrowers, never mind the economy. Kris