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

To: CalculatedRisk who wrote (58482)	4/17/2006 4:16:43 PM
From: bond_bubble	Read Replies (3) \| Respond to of 110194

Are you saying there is no speculation in this oil/commodity price? Also, too much of money/credit has been created in the past - and quite a bit of them must be harboring in the commodity funds etc right? I bet some of the smart guys bailed out of bonds earlier and cashed their bond profits and invested in commodities. Now Fed has to make sure too many of the people left holding the bonds dont cash their bond profits - because, then they have to put those profits somewhere in the market - which in todays world looks like is the commodity market!! I hope you are not assuming that house prices are high because of demand!! well, in a way it could be speculator demand - but we should call that as speculation and not demand!! Just as there was "speculative demand" in house (because people have to live somewhere!?), there is "speculative demand" in commodities (because 2.3B Indians and Chinese have to build a house and consume the goodness the earth has to offer?!). Now those asians have too many dollars, that they will have to spend essentially on commodities to provide jobs for their citizens!! Poor Asians are underestimating the power of USA to default on those dollars they hold!! It is going to be the worst kind of deflation (similar to the one UK had in 1929) - higher commodity prices (Jim Rogers has said that commodity investment was THE BEST investment in 1931 for few years in Peter Schiff interview) - high interest rates - falling dollar (not much though as I expect very high US interest rates) - higher cost of living - job losses - bank failures - It is going to be worse than 1929 depression....