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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 (75076)	12/8/2006 4:04:01 PM
From: GST	Respond to of 110194

There comes a point of no return when the foreign debt already incurred must be serviced and the value of the currency gets wiped out as money is printed for this purpose if nothing else. Our deficits are ruining our economy -- our lack of savings, our government deficits and our current account deficit threaten to eat us alive. The deflation crowd still thinks the US is reliving the 1930s. Well, you can only point out the profound flaws in that view so many times. The most thick skulled are the pure monetarists. For them there is no global economy, only the US all alone, an isolated economic island, with only one thing driving price levels -- the supply of money and credit. Listening to them is like listening to a person trying to clap with one hand -- funny and sad at the same time.

To: Mike Johnston who wrote (75076)	12/8/2006 4:58:54 PM
From: Jim Fleming	Respond to of 110194

,Mike re deflation As a guy that was once thought to be "smart" in the realm of interest rates, cash flows and credit, I look at the totals of debt outstanding, guess at the cash flows to service that debt and then look at the derivative disaster manufactured out of thin air and say, simply, a major portion of that debt, straight and derivative, is not going to be paid. Any significant increase in interest rates would accelerate a collapse of the world financial system. A deflationary depression is more probable than 10% inflation over the next five years. If I am right prepare for a radical swing to the political left in the U.S.. If I am wrong and inflation crashes the system, prepare for blood in the streets. Jim

To: Mike Johnston who wrote (75076)	12/9/2006 3:44:28 PM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

'I agree with you regarding odds of deflation. The 1929 moment was back in 2000/2001 after bursting of the biggest stock market bubble in history.' And don't forget the even bigger 1929 moment during the RTC days of the early 90's when commercial real estate nationwide plunged 60-70%, the most heavily populated areas of the northeast and California home prices plunged 30%, credit conditions were extremely tight and our collapsing banking system was on the verge of insolvency..