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

To: russwinter who wrote (66614)	7/21/2006 1:16:51 PM
From: UncleBigs	Read Replies (1) \| Respond to of 110194

gasoline is one of the last areas to see a demand drop. look at consumer discretionary. atv's, boats, Walmart crap, Target crap, housing...it's clearly in the process of imploding. missed mortgage payments and selling the car to take the bus will come later. Bully wannabes are cratering. This economy is not run on Bully's discretionary spending. Bully's ass is planted in the sand at the Hamptons while he sends flowers and e-mails to his 19 yr. old mistress and daytrades oil futures.

To: russwinter who wrote (66614)	7/21/2006 2:34:31 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

I sent this comment to someone at Minyanville on Xie [What a bunch of nonsense - oil speculation does not cause inflation. Here is another person that has no idea what inflation is. Furthermore his ideas are contradictory. He is worried about demand slowing causing a recession yet wants aggressive hikes to slow demand for oil. That is illogical IMO. Interest rates are a blunt instrument and if the worry is a consumer recession, it is illogical to believe that higher interest rates are the solution. - Mish] and got this response He is right. You are right. This shows what a box we are in. Central bank loose policy (money growth is still egregious) fuels speculation in all assets. We need higher interest rates to reduce excess money in the system. At the same time global economy looks to us it will roll into recession via a weakening consumer. Higher interest rates plus recession equals deflationary spiral.