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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 (75130)	12/9/2006 5:07:48 PM
From: SouthFloridaGuy	Read Replies (1) \| Respond to of 110194

Meanwhile you still fail to admit that you and the bears have been predicting deflation since 1995 (Crest of the Tidal Wave) and more recently 1998. You guys had charts overlapping the 2000 bear market with the 1929, the Nikkei versus the Nasdaq, etc. You totally disregard that economic policy was TOTALLY different in the 30's, given the gold-standard, Smoot-Hawley, FDIC, lack of automatic stabilizers, etc. You totally disregard that the structure of the Japanese economy and banking system is far different than ours. You disregard financial innovation such as securitization, globalization, free capital markets. You disregard demographic differences, CHINA/India, and the fact that during Japan's funk, capital LEFT Japan for higher returns elsewhere. Could that have been part of the problem, Mish? The U.S. as screwed up as it is, still has the highest nominal and real interest rates among Japan and Europe -- the two largest competing areas of for freely moving capital. Meanwhile, every one of your contentions is disproven. Never in your wildest dreams did you think housing could gain 100% while the market fell 50%. And it's beyond your intelligence to believe the market can gain 100% while housing falls 20%. All the while, the general macro-economy can hum. Sh!t, my comp went up 25% this year because the rest of the street is getting paid. BIATCH! Why? Because the Fed has infinte ability to inflate in a world where the major economies run policy that is even more absurd than our own. Now that is ghetto-fabulous. Only in America, baby. God Bless this great Nation.

To: mishedlo who wrote (75130)	12/9/2006 5:30:31 PM
From: GST	Read Replies (1) \| Respond to of 110194

<Oddly enough neither you or GST seems to understand that it the expansion of consumer credit which created the asset bubble in housing and the debt bubble in consumer spending that makes deflation all the more likely.> There is indeed something odd here Mish. Understanding the role of credit during an expansion is relatively easy -- hell, even you can probably do it. Understanding what happens to a country like the US with tens of trillions owed to foreign creditors during a downturn requires some education and an analytic frame of mind -- sorry that you can't seem to contribute to this conversation. Most people here were willing to give you a chance -- you just never rose to the challenge.

To: mishedlo who wrote (75130)	12/9/2006 8:45:00 PM
From: Tommaso	Read Replies (1) \| Respond to of 110194

Mish, it all had to do with the fact that a dollar was a dollar was a dollar, even after Roosevelt seized gold and devalued the dollar against gold. For the previous sixty-five years, prior to 1930, the U. S. government had pursued a hard money policy, and even during the inflation of about 1915-1920, you could still get gold coins any time you wanted to for your dollars. In the Great Depression, it was literally profitable to bury your paper money in a Mason jar in the back yard. When you dug it back up, you had a lot more purchasing power. Now all we have a fiat currency. How can you ignore the steady rise in prices of commodities? The most amazing in the last 3-4 years is uranium, rising from about $10 to $65 (latest inside estimate as of yesterday). To expect a 1930s-style deflation now is like expecting the return of the mule as the chief agricultural machine. You are comparing Japan with the United States of 1930. That makes some sense and is at least provocative of useful discussion. When you try to compare the United States of 2006 with the Japan of 1990, you have strayed into indefensible absurdity. Of course, if all the world central banks suddenly cooperate in raising short term lending rates to 20%, you might be right.