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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Casaubon who wrote (49989)	4/24/2006 12:28:57 AM
From: Perspective	Respond to of 116555

It seems that money supply creation through time has rippled through different asset classes. It seems that the most immediate impact of artificial pressure on interest rates by the Fed is to inflate bonds. However, there is fairly quick transmission to other asset classes. Stocks follow on short order, and real estate usually tags along a little later. However, once inflation has marked up bonds, stocks, and real estate, it begins to stoke demand and turns up in commodities. Monetary inflation, that is. When the Fed engages in monetary inflation, it artificially lowers interest rates, inflating many asset classes. Among them are bonds, stocks, and real estate. BC