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

To: Mike Johnston who wrote (70124)	9/22/2006 4:14:12 PM
From: anachronist	Read Replies (1) \| Respond to of 110194

Agree with your asessment. Businesses will pay on increasing input costs where they can to the next level of production. However, that fails when it gets to the final consumer, who is being squeezed by falling real wages and rising credit costs. Consumers balk and pizza parlors go out of business. Failure then spreads back up the chain of production as bakeries and meat suppliers lose customers. Classic demand destruction. The big problem is that this is happening at negative real interest rates.