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

To: Wyätt Gwyön who wrote (53978)	2/16/2006 9:23:16 AM
From: mishedlo	Respond to of 110194

Since GST refuses to answer any of my questions perhaps you can ask him just what causes 1) A persistent rise in the price of goods and services 2) Why the US$ is in such a bubble He has harped on and on and on about the US$ bubble. OK so why is the US$ in a bubble? Because he says so or because of some other reason? I wonder what that reason might be. Mish

To: Wyätt Gwyön who wrote (53978)	2/16/2006 10:19:28 AM
From: GST	Read Replies (1) \| Respond to of 110194

<so in the wake of a housing collapse, the persistent decline in associated goods and services will be deflationary (to the extent it happens)> In the wake of a housing collapse, if indeed that is what happens, you should expect a persistent decline in demand for the dollar, and a persistent decline in its value as a result. A persistent decline in the value of the dollar will drive the price of money higher (it will cost more to offset the currency risk faced by foreign investors). A sharply lower dollar will drive prices up in an economy that is already nearing the $1 trillion dollar trade deficit level. Net net -- yet will buy less and you will pay more for what you buy in an economy that is either stalled out or actually shrinking -- i.e. we are likely to see stagflation as the outcome of a housing collapse.