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

To: bond_bubble who wrote (51176)	1/24/2006 2:49:03 PM
From: Mike Johnston	Read Replies (4) \| Respond to of 110194

You are totally right, but something similar has been happening for the last couple of years. Why did oil go from 25 to 67,at the same time as copper went from 70 to 200 ? Every time oil went above 40, the economy went into recession. Now its pushing 70 and nobody blinks. Why ? Because the Fed is monetizing debt. So now it has to go to 100. Then the economy has to hit the skids. If the Fed continues to print to avoid the economy from hitting the skids from 100 oil then oil will go to 200. And so on. Inflation right now is running 8% , so why do bonds yield 4.5% Everything and i mean everything is out of whack and who knows how it will end. The Fed will not fight inflation, because they create inflation and their disinformation campaign (no sign of inflation anywhere) allows them to fool enough of the public to keep the system going for now. But i think the Fed and the Feds are cornered. The more they intervene, the more intervention is required which creates even bigger mess which in turn will require even bigger intervention, which is exactly the point of your post. Bottom line: there is no free lunch, never will be, and you can steal from Peter to pay Paul only for so long. It is like a giant balloon that springs leaks constantly, as soon as you plug one leak a bigger one shows up on the opposite side, because the structure of the balloon cannot take any more pumping.