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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (11447)	11/13/2006 4:47:09 AM
From: TobagoJack	Respond to of 217945

the sort of collapse that is coming is biblical in nature, and way outside the sort of parameters that will allow a cisco to survive as its lesser but better placed competitors take root and take over, unless cisco relocates it corporate HQ, most functions, and main stock listing away from deflation central ... from a pal .... Excess liquidity brings about excess valuations, but also low volatility. If we ever see a period of tightening again, the one sure bet is that we see higher volatility. David Roche has done great work on this. Total debt in 1970 was 78.1% of GDP. In 1990 it was 83.3% of GDP. Today it is 130% of GDP. However, we didn't have securitized debt or derivatives in any substantive way before 1990. But if we add in both net derivatives and securitized debt into the equation, we get a different equation. Not only is the multiplier effect much higher (a derivative contract doesn't require that it hold 10% back, like banks are required to do), but the total amount of this "new monterization" means that total money is now 836% of GDP! That is why we have seen tremendous asset inflation, but hardly any CPI inflation. My question is, we've seen huge advances as this monetary bubble expands. What happens if we ever get a contraction in this money supply? Or is that in impossibility? If so, then trees really will grow to the sky..... But in the meantime, it certainly would explain the disappearance of alpha.