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

To: John Vosilla who wrote (57087)	3/29/2006 2:08:44 PM
From: ild	Read Replies (5) \| Respond to of 110194

New high on 10 year yield stockcharts.com EDIT: Oil stays above $66

To: John Vosilla who wrote (57087)	3/29/2006 2:15:05 PM
From: NOW	Respond to of 110194

>Perhaps deflation is the easy out for many thinking just saving your money and earning a decent return on a CD will get you ahead?> That sure describes a lot of americans these days, or maybe not

To: John Vosilla who wrote (57087)	3/29/2006 3:14:56 PM
From: GST	Read Replies (2) \| Respond to of 110194

If its the dollar bubble that bursts, holding dollars is not going to help. For many, it is impossible to imagine the dollar dropping. Instead they think that interest rates will drop and prices will come down. The deflation crowd think we will continue to have a strong dollar. if you shift your gaze from housing prices to the price of the dollar, then you arrive at the opposite conclusion. The dollar looks wildly overpriced, and it is priced in markets that can savagely discount risk when that risk is grasped and about to be priced into the market. If the dollar is your concern, then you would expect rates to continue to rise -- no matter what the fed does. And if rates rise the economy stalls and the vicious cycle becomes self reinforcing, much as the strong dollar was self reinforcing for so long a time. If the dollar goes down the drain, it won't matter which of several dollar denominated assets you own. And holding cash will do you no better.