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

To: mishedlo who wrote (74140)	11/15/2006 5:11:54 PM
From: SouthFloridaGuy	Read Replies (1) \| Respond to of 110194

>>I can not tell you when. Nor do I know what the trigger will be either but I suspect something related to Japan or the YEN.<< It will be due to INFLATION which will lead to much higher real rates needed to kill it. All else equal, this madness can go on for a long time, but sooner or later INFLATION will be its by-product. Hence the pre-emptive accumulation in gold by smart money. In other words, a typical economic cycle which will be magnified by the insane amount of credit leverage.

To: mishedlo who wrote (74140)	11/15/2006 5:24:01 PM
From: NOW	Read Replies (1) \| Respond to of 110194

would anyone like to comment on this hypothesis:"Many investment advisers recommend gold and gold mining stocks as a hedge against hyperinflation. They note that gold rose rapidly during the inflation prone 1970s, and that demand has exceeded production for several years. In addition, several gold Exchange Traded Funds (ETF)s have appeared in recent years that boosted demand. Gold and gold miners should do well in the future, but not as well as other metals. There are three reasons for this... "rest by sub only

To: mishedlo who wrote (74140)	11/15/2006 6:29:05 PM
From: bond_bubble	Read Replies (1) \| Respond to of 110194

Do you think 1929 depression was because of pure exhaustion or because of "inflation" (august interest rate increase)? I posted Miller's comment that "price inflation appeared later". Also, in 1930, stock market did rise quite a bit (about 50% of 1929 peak) and there was no exhaustion there. The speculative sprits were alive in 1930!! I'm still reading History of Money by Rothbard. I want to find where inflation was (like in a Grant's article, inflation was in oil in 1933) in 1929. I do agree with you that Yen is likely to depreciate further because of the Yen carry trade - this might force BoJ to increase interest rate (because of inflation in Japan) and cause depression in Japan (and elsewhere). Essentially, my guess is that interest rate is what is going kill this credit bubble rather than exhaustion. Look at the refinancing index!! This is supposed to be lean winter season but it is reading better than summer!! A month ago, I was checking out houses in BayArea,CA and I noticed quite a bit of traffic in high end open houses (condos and townhouses were dead) - $1Million+ open houses. Also 2 houses in Palo Alto sold in a month (for million plus). Actually, one of the house that I visited increased the price by 100K (may be they saw lot of traffic) 2 weeks later. But, I dont think, there is a panic to sell the house. People with equity are trying to cash in by reducing prices. But I dont think losers are desperate to sell yet at lower price and take a loss!! You are seeing lot of inventory in FL, but not a panic selling yet. It could prolong longer as long as derivative markets are insuring these refi bonds. Miller's comment: Message 23008439