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

To: John Vosilla who wrote (66636)	7/21/2006 2:27:03 PM
From: Mike Johnston	Read Replies (2) \| Respond to of 110194

Rich or not, whoever parks money in bonds when inflation is accelerating , with structural deficits, low coupon and vulnerable currency, will suffer. No doubt a recession would wipe out many businesses and "fortunes" built on sand. And the Goldman Sachs pig men would be in the world of hurt if their bonus would only cover maintenance on their Hampton home. On the other hand, severe recessions provide ample opportunity for wealthy and smart operators to pick up some assets for dimes on the dollar. As always, somebody gains, somebody loses.

To: John Vosilla who wrote (66636)	7/22/2006 12:46:49 AM
From: shades	Read Replies (1) \| Respond to of 110194

True but much of the accumulated wealth gets parked there? Kerry lady has hundreds of millions in tax free municipal bonds - if you looks at the PFD's (personal financial disclosures) of bush, cheney, and congressman - lots of bonds and cd's (in cheneys case european bonds - hehe - what a patriot eh?) What did gordon gecko say - 2/3rds of the wealth controlled by idiot sons and widows. At what point does inflation eat them alive and they take on some different investment philosophies? What happens to valuations of private businesses in an economic and stock market downturn with rising long term interest rates? My grandpa said during the depression shoe repair shops and canning companies took off - people couldn't afford new shoes and freshly prepared food - had to repair the old shoes and buy those cheap canned goods. Applebees did just say princess can no longer afford thier food. I remember reading about a guy in the NE during the gas crisis of the 70's - he had bought some old equipment to make toilet paper rolls - was able to sell it less to the local grocery stores than the big boys like charmin - (I guess thier gas costs got too high but I dont remember specifically) He made a fortune. Bought a few more of the machines - sold to a few more stores a little further away - was making great money - then a few years after that the big boys were able to finally undercut him and he went bankrupt - have to be nimble.