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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (44613)	1/16/2006 10:15:25 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

I failed to add the other thing you do not get. Much of the whole FN world is as Fd as we are and too that I will add that IF perchance you are correct and interest rates here go to the moon we are talking a worldwide depression. Unless and until the world chooses to get by without the US consumer they will finance us. Now..... This is where our beliefs merge again. This will NOT last forever. And I suspect we agree on this.... Because of China. Right now the UK is as Fd as we are, Europe is a basket case headed for deflation on account of demographics, and Japan and China still depend on the US. Once that US consumer debt is wiped out (lord only knows how long the FED prolongs the agony) I suspect you will be correct and there will be rampant inflation. We have 20 years worth of credit to implode in the US. Do you disagree with that? If not what is your number? 10? 5? 8? Whatever it is printing of money by the FED will not be able to slow it for the simple reason they will NOT give it to debtors to pay off debts. Consumer debt is a far far bigger problem (NOW) than govt deficits. It is odd because sometimes I think we are in violent AGREEMENT on things. Then again timing is everything but I will stick to a K-cycle approach that says winter follows autumn. We simply have not had a credit purge and that credit purge will be deflationary as per Mises and as per K-cycle theory, and as per simple logic (even though you just do not see it). At any rate, we agree on this: There is going to be one freaking problem for the US when China no longer needs US consumers. That, in my estimation is quite a ways off. Mish