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

To: ild who wrote (50281)	1/19/2006 3:36:37 PM
From: TimbaBear	Read Replies (1) \| Respond to of 110194

ild I think this scenario is quite plausible. I have more questions than answers though and the questioning seems to get me into hot water more often than not! Just seem to have a built in resistance to toe-ing the company line. You seem to be quite independent as well! Timba

To: ild who wrote (50281)	1/19/2006 3:42:19 PM
From: chainik	Respond to of 110194

<I don't think comparing Russia in 1991 to ANY other country makes much sense> Why? Idiotic leadership, brainwashing in the media, brutal mass murder (Afgan), big budget deficits, the general mood that the current state of affairs can continue indefinitely. Doesn't it look similar? <Do you call me inflationist or deflationist?> I'll stay away from inflation/deflation debate. I disqualified myself (g).

To: ild who wrote (50281)	1/19/2006 3:42:31 PM
From: mishedlo	Read Replies (3) \| Respond to of 110194

I am consistent. Deflation is a decline in credit and money supply. In Japan that decline in credit happened faster than the BOJ's attempt to pump up money supply. Velocity on money collapsed. I maintain that is what will happen here, which of course makes the US$ a sideshow, at least to me. My position allows for oil prices to rise because of peak oil or whatever. In fact, I think rising oil prices would make the other problems worse as in increase the number of bankruptcies. Mish

To: ild who wrote (50281)	1/19/2006 3:55:59 PM
From: regli	Read Replies (1) \| Respond to of 110194

I am in just about complete agreement with your scenario though I am worried considerably more about the aftereffects of the initial dollar fall. I haven't seen anything to-date that prepares the U.S. public mentally for an unpleasant period. It will take years to change the public's perception that they deserve better. Therefore, in order to get elected or maintain an influential job, an optimistic attitude with nice promises of a better future are just about a requirement (remember the Reagan, Carter debates?). Remaining in power and therefore at the trough will be much more important than protecting a few banker friends IMO. I therefore believe that excessive money printing will be used to pull the wool over peoples’ eyes regarding the unpleasant reality of a severely declining economy. Once that process starts, it is very difficult to stop. I actually believe that we have already observed the perfect dry run for money from heaven (helicopter money) though I haven't really seen it mentioned anywhere in those terms. whitehouse.gov "And for this year's first installment of the tax cut, the check will literally be in the mail. (Applause.) Late this summer and into the fall, every single American who pays income taxes will receive a check. Single taxpayers will receive a check of $300. Single parents who are heads of household will receive a check of $500. And married couples will receive a check of $600." Now that the infrastructure and procedures have been established for such distributions why not deploy them again when the next "emergency" occurs. I am sure that the money, just like last time, will be spent very quickly by those in unenviable circumstances, resulting in a short term boost to popularly quoted figures. In this scenario, bonds will not do very well.