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

To: regli who wrote (57378)	4/3/2006 11:15:50 PM
From: andiron	Read Replies (1) \| Respond to of 110194

dollar gets support till fed is raising rates and differential is higher than euro etc..(4.75 vs 2.5 eg) If fed pauses and everyone else, dollar may still be okayish.. when fed starts cutting, what currency is the best bet? OTOH,i fear it is possible that fed keeps raising rates more than anyone realizes..into late 2007?

To: regli who wrote (57378)	4/4/2006 12:29:25 AM
From: booyaka	Read Replies (4) \| Respond to of 110194

How successful it will be, I don't know but I am looking for the Fed to pull out all the stops. I was just thinking along these same lines today. I think the success of the Fed's reflationary efforts will depend on the timing. If the Fed moves to reflate early enough, I see no reason why they can't prolong the credit bubble. If they wait too long (i.e., until after the deflationary forces have taken hold), they'll probably fail. I think Bernanke will tend to err on the side of too early rather than too late because of his study of the Great Depression. Then again, the Fed might be forced to keep rates higher than they want to in order to attract enough foreign capital to finance the twin deficits. There're so many moving parts, it's virtually impossible to predict how everything will play out. I am not looking for deflation in prices but expect deflation of purchasing power particularly in the developed world. What's your outlook re: housing prices?

To: regli who wrote (57378)	4/4/2006 2:45:06 AM
From: mishedlo	Read Replies (1) \| Respond to of 110194

excellent post I am not sure Bernanke will see what is coming that quickly I am not sure that if he does the rest of the FED will go along. But otherwise I think you have it nailed Mish

To: regli who wrote (57378)	4/4/2006 2:47:15 AM
From: Skywatcher	Read Replies (1) \| Respond to of 110194

perhaps the only reason to increase rates is to keep the all powerful buyers of the US RECORD DEBT happy...that would be Japan and China...otherwise continuing to raise rates will ensure the demise of the US economy with the inflationary excuse, as the entire inflation equation is now driven by OIL which they have allowed to get completely out of control. So by saying they are protecting 'us' from inflation they are putting extra pressure on all those with debts who are being squeezed by the price of oil to even have enough money to drive to work and increase credit card payments, and increase ARM rates....not real smart for 'us'

To: regli who wrote (57378)	4/4/2006 7:26:15 AM
From: dpl	Respond to of 110194

"I therefore am not of the opinion that we will see a quick deflationary period similar to the great depression but a steady period of decline with deflationary and inflationary fits and starts all at great harm to the dollar." How about a short and quick version of the great depression followed by the 1970's that lasts for several decades.

To: regli who wrote (57378)	4/4/2006 12:23:43 PM
From: jim black	Respond to of 110194

Good thread...I have been lurking and learning for some time. What is not often mentioned is the magnitude of unfunded liabilities, social security, medicare, medicaid, double & triple pensions by govt employees, "entitlements all" . I have seen the number at various sources range from 42-53 TRILLION dollars, well triple+ the GDP over next few years... Question? (obvious answer is printing press, Helicopter Ben) Where in God's name is US government going to come up with that kind of money. Bothersome wakeup call on Reuters today about a senior Chinese economist warning/wanting to reduce China's holding of US dollars, clearly also worrying about US financial collapse since they own a trillion in US bonds. Also just finished disturbing book by Bonner & Wiggin, "Empire of Debt" Boys & girls we are in for hard times...we can run but we can't hide Jim Black