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

To: bart13 who wrote (74187)	11/16/2006 3:27:26 AM
From: mishedlo	Read Replies (2) \| Respond to of 110194

I disagree with Hussman frequently even though I agree with him more often than not. My last big disagreement was a few months ago on the huge difference between the intermediate and final PPI. He thought it was showing pent up inflationary pressures but I thought and posted on it several times that it showed inability to pass on costs and thus the final PPI was headed lower. Maybe I was lucky but my scenario played out not his. He also has some unique views on inflation. But when it comes to the Fed, I agree with him that the Fed is not in control. In fact I wan wondering if that is why Bernanke does not want to pay attention to M3 (unlike Trichet) because he can not do much about it. As you suggest the Fed is not powerless, but they sure as hell are not on control. If deflation was so easy to fight Japan would not have been struggling with it for 20 years. If consumers decide to stop borrowing the Fed can not force them to. If businesses decide to stop borrowing the Fed can not force that either. Finally the Fed can not create jobs. I can not think of any job creating activity that will replace the housing bubble if the Fed attempts to inflate once again. Mish

To: bart13 who wrote (74187)	11/16/2006 10:19:59 AM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

Bart the bottom line is significant loss of purchasing power over time and benefiting from it rather than being on the other side. We can rehash all the problems constantly talked about on this great board all of which is well known but this has been going on for about 40 years now and the perpetual doom and gloomers are always wrong. Go back and read this board from it's beginning, Ravi Batra's book 'The Depression of 1990', comments by Volcker around 1985 on the twin deficits and any article on the subject during the mid to late 1970's. Savers and those that play too much defense have been penalized for ages. This isn't anything new. It even appears the zero down zero percent financing used by the auto makers post 9/11 is now standard across the board to keep US consumerism spreading. If we are in a new age of prosperity and innovation in a low interest rate reflationary environment I sure want to be on that train<g>