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

To: mishedlo who wrote (66639)	7/21/2006 4:25:03 PM
From: russwinter	Respond to of 110194

First off, as you well know Xie views are in perfect alignment with mine. I really wonder though if Brazil America (say 60% of population) will be hurt worse by this inflationary boom climate, or by higher interest rates and hopefully a whiff of deflation (bring it on!).. Just a SWAG, but figure that only about half of BAs are homeowners, and of that maybe a third are using variable interest rates. So maybe about 10% of Brazil Americans gets really crushed by higher rates, but if they get inflation relief (this is causing the weak economy more than higher rates), that will be a greater positive. Besides, it's really too late in the game now to worry about the losers (speculators or the imprudent of one sort or another) of the housing Bubble. Of course Brazil Americans might lose jobs in Bubble industries like housing construction and retailing, but he'd lose as much or more just letting inflation rage on. So I view a deflationary whiff as at least better jobwise to more inflation. Inflation is a real cancer now. I say bring on a big whiff of deflation, it won't be a free ride, but the net benefit will be positive compared to allowing Bully inflation to run amok. I think Bullies and especially Bully wannabes will lose big if inflation is curtailed, and so what, let them be the group that pays the price, quit piling on Brazil America. It would also check the Gini coefficient, and reverse some of the Brazilification of America. There is NO way lower rates now, could be good policy, unless your goal is to line the pockets of Pig Men and Bullies, and continue destroying everybody else. Interest expense is one fourth of the essential items on this chart 1. It's inflation of other essentials that is causing most of the problem as shown on chart 2: idorfman.com idorfman.com