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

To: Chaka who wrote (53934)	2/15/2006 5:12:35 PM
From: GST	Respond to of 110194

When we no longer produce things, and when we have a dollar that is reviled as a debased currency, and when we as a nation are swimming in red ink from our inability to finance our own government, and when our current account deficit can no longer be financed by foreigners, then I think the prospects for sharply higher import prices will hit us extremely hard. 1. The cost of imported goods will soar. 2. The cost of imported money will soar. 3. The cost of imported commodities will soar. 4. The temptation to print money to stave off crisis will soar. Under these conditions, you will not see asset deflation -- and you certainly won't see general price deflation. Instead you will see people with fistfuls of increasingly worthless dollars buying each others inflated assets and then not being able to turn those dollars into anything they can eat or use (except to the extent that you can "use" you ridiculously priced house).