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

To: Lee who wrote (66948)	7/27/2006 12:31:02 AM
From: russwinter	Respond to of 110194

There's a little to this developed market theory, but the issue I've raised is how FCBs especially, buy the bottom of the barrel of these securities like TIPs, and agencies. One explanation of the Japanese role may be as a quid pro quo for military protection. It's almost a classic Mafia protection racket, whereby Japan picks up the worst of the crap we offer.

To: Lee who wrote (66948)	7/27/2006 2:01:01 AM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

'A rising current account deficit is no longer a sign of weakness in this context. The fact that global savers accommodate U.S. consumers by keeping U.S. interest rates lower than they otherwise would be and the dollar stronger than it otherwise would be is simply a manifestation of America’s comparative advantage at supplying wealth storage facilities.' So this results in more overvalued assets and excessive consumption patterns by Americans thereby creating even more cash to redeploy for the new wealthy class outside the US that still has only one wealth storage facility to hide in? Thanks for a very interesting article. These feedback loops, though, are getting kind of scary like global warming to me.