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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 (67773)	8/9/2006 11:18:26 AM
From: GST	Read Replies (2) \| Respond to of 110194

I don't expect a spike in interest rates until we see real strong signs of a slower economy. I think that could take another year. Oil prices are a wild card. We could see cuts in short term rates by Christmas if oil keeps moving up. If there is one thing the fed now understands, it is that the economic cycle is MORE tied to oil prices than to interest rates. To offset oil they will be FORCED to cut chort rates. Cutting short rates in a rising inflation and weak dollar environment will be the key to send long rates higher. At that point you have a bad situation that could take a few years to play out -- perhaps five years or more, and possibly much, much more (like ten or twenty years).