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

To: benwood who wrote (69850)	9/15/2006 4:21:51 PM
From: mishedlo	Respond to of 110194

All smells deflationary, until somebody else in the world picks up the slack, and I don't see that in any meaningful way for at least 10 years. But short term (and recent history), debt has been taking up the slack, and so demand is still holding fairly strong. I don't think this will be true in 12 months' time. I agree on every count. China is nowhere near ready to pick up the slack, nor is Europe. But demand so far has been stubborn (primarily because of loose lending standards and rising asset prices). I think both of those fall by the wayside soon but I have thought that for some time. To suggest there are not huge deflationary forces suggests a lack of understanding about what deflation really is. It also suggests a lot of faith in the Fed that is misguided. Mish