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

To: GST who wrote (50700)1/22/2006 12:18:26 AM
From: mishedlo  Read Replies (1) | Respond to of 110194
 
Well I belive with a fall in money supply there will be a HUGE decline in asset prices (houses and the stock market). There may or may not be a fall in oil prices. If there is, I do not expect it to be a brutal decline. There will likely be a fall in copper and steel, the former could be very temporary. There will be a fall in services (ie price of haircuts and lawn mowing services etc). I expect auto prices to fall as well. Computers and gadgets (Ipods etc) will likely plummet.

I can not speak for medical expenses, property taxes, gasoline, heating oil, or the like.

Food bought in grocery stores could very well go up but I expect restuarant prices to plunge. Best guess, a small increase and a huge plunge as people stop discressionary spending.

All In all I am forecasting a general decline in prices as a result of a fall in money supply.

Houses will be at the forefront of the decline and the most important too. Oddly enough the CPI will understate the decline as it understated this enormous ramp in prices.

So if you want me to make a stand on prices....
There it is.

Mish



To: GST who wrote (50700)1/22/2006 1:55:13 AM
From: John Vosilla  Read Replies (3) | Respond to of 110194
 
For Mish's theory to play out nondiscretionary expenses would have to go down. These are the costs of goods and services he needs in his basic daily survival. Many are provided directly or indirectly by either the government or monopoly. Others would just shut down if the can't make a profit.. Most outside of clothing, some household items and basic electronic gadgets are not dependent at all on globalization or China..


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