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

To: dpl who wrote (61715)	5/23/2006 9:55:16 AM
From: GST	Respond to of 110194

Japanese banks became the biggest in the world because they had the biggest real estate backed loans in the world. The 80% drop in Japanese real estate prices made the whole financial system bankrupt if they marked the loans to market -- o they didn't and chose instead to suffer 17 years of relative stagnation. It may be hard to accept, but our bubble is smaller than what happened in Japan, and utterly different in key respects. In the US we have a tradition of wiping out pigs who go too far. That will hurt in the short term but is overdue and will be beneficial. The real bubble is the dollar -- the only way out of that bubble is inflation. So expect two things -- stagnation and inflation. The worst strategy is to hold dollars and dollar denominated assets.