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

To: UncleBigs who wrote (59124)	4/22/2006 2:50:18 PM
From: bond_bubble	Read Replies (1) \| Respond to of 110194

Uncle, One thing that is important is the time line. I believe all prices including commodities will fall - but the timelines are NOT ALL AT ONCE. The moment there is slowness, the Fed might not be able to lower interest rates this time (this is Doug Noland's position from this weeks article). And this has been my position based on PPI being higher than CPI. But what is important to understand is the Credit bust does NOT mean immediate fall in all asset prices. Just as credit bubble does not cause immediate inflation in all assets!! whatever assets have contracts (like commodities) and whatever assets will be bought using the reserve currency in FCBs (like commodities) can survive longer with higher prices!! i.e until all the reserves are depleted in FCBs (either thru default or devaluation or plain spending) and the contracts for high prices expire with corporations (for both investing and industrial use) - i.e until ALL THE CREDITS ARE EXTINGUISHED - some assets could have life breathing in them. But eventually, everything falls to ground zero. The TIMELINE is most important. I think it is risky to bet on this timeline - but people with guts (understanding the final consequence is nearer) can go for it I guess...Because commodity will take longer to fall, Fed will not be able to lower interest rate this time (this is Doug Noland's position as well). My belief is, depending on what Fed and US Govt does in the next 5 years (on monetary policy and fiscal policy regarding SS, medicare), interest rate in future can fall to 0% (in ten years, if Govt defaults on SS and medicare) or increase to 10% or higher (if govt supports $ fall aggressively and govt spends more and more on SS). I've a feeling, the govt will make it worse and choose the 10% interest rate route....

To: UncleBigs who wrote (59124)	4/22/2006 5:19:03 PM
From: shades	Respond to of 110194

demand for just about everything will evaporate. I expect nearly everything to fall in price as a supply glut forms. God I really hope you are right uncle - those 2000/hr hookers in Vegas are ripping my asshole a new one! I have looked in a couple places on the net for the cost of an average hooker through the depression - I can't find a chart - do you know where one is? It being the oldest profession in the world - you would think the info abundant. :)

To: UncleBigs who wrote (59124)	4/25/2006 3:52:41 PM
From: sea_biscuit	Read Replies (3) \| Respond to of 110194

Here is my situation. I own a house (or more precisely, owe money to the bank!). The equity is probably 20 to 30 percent (SF Bay area). I expect all of the equity to evaporate in the event of a steep recession, plus maybe another 10 percent on top of that. i.e. I think it would be a haircut of 30 to 40 percent. Now, without having to sell my house, I want to come out, in the worst case, owing nothing to the bank. Towards that end, I want to set aside some 7 to 9 percent of present value of the house in GLD/CEF etc. Does this look OK? Do you have any other suggestions for me to consider?