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

To: Crimson Ghost who wrote (47900)	12/21/2005 3:46:21 PM
From: ahhaha	Respond to of 110194

The guy says, "Ben Bernanke and his FOMC colleagues may make the unfortunate discovery that the only way to slow down a credit-driven boom is by creating fear in the minds of consumers who are enjoying the heady experience of overdraft facilities on a scale that few had imagined possible." The FED has never used a blunt instrument for moral suasion, and they never would. What has FED been doing for the last 1 1/2 years? Raising ff systematically and concurrently sending out spokesmen making endless comments about the risks of inflation. But let's look at the claim "credit-driven boom". It's out of hand false. There's no evidence for a boom, and what kind of credit is the guy implying? Withdrawal of home equity or revolving? Has to be the former which isn't quite credit in the sense he implies. What does he imply? Nothing. He uses "overdraft facilities". "overdraft facilities" means nothing. It's just a vague term used to push people's fear buttons so this guy can continue to sell his spiel to the editors. We probably will not see the end to this expansion until the spending boom produces inflation that, Level of demand causes inflation? Will Phillips never die? in turn, forces the Fed to raise interest rates to levels that hurt the real economy. Final demand causes rising rates? The inability to supply causes rising rates, not an increase in final demand.