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

To: orkrious who wrote (75312)	12/11/2006 3:21:46 PM
From: John Vosilla	Respond to of 110194

Assets bubbled because real interest rates were negative and credit was easily available. Growth in monetary aggregates and growth in credit fuel inflationary pressures down the road.. As a sidenote I believe we are only in the early stages of pass throughs of rising costs from inflated asset and commodity prices part of the 'cost push' facet of inflation. Folks can call it what they want but in my world everyone thinks their costs of living has been literally going through the roof in recent years with the inflection point about three years ago.. Perceptions of double digit increases per year in their costs of living are widespread..

To: orkrious who wrote (75312)	12/11/2006 3:24:08 PM
From: GST	Read Replies (1) \| Respond to of 110194

LOL -- Do you hear what you are saying? You are talking about prices while denying that you are talking about prices. When this guy talks about inflation he is talking about prices. He sometimes uses the word price inflation. He sometimes refers to inflation showing up in assets. If inflation shows up in assets how do you know? Not with a rectal thermometer I can assure you. He knows because of persistent changes in asset prices. Money supply and credit expansion play a role in fueling inflation -- nobody ever disputes that for a moment. But only the lunatic fringe claim that an expansion of money and credit supply is inflation. Inflation is always a matter of persistent changes in prices -- the only serious debate (other than in flaky flaky land) is on the contributions of various factors, one of which is money and credit supply.

To: orkrious who wrote (75312)	12/11/2006 8:10:53 PM
From: Wyätt Gwyön	Respond to of 110194

The Fed can't control where it goes. In this case it went into asset prices more than anything else. that is the way Grant has described it, going back to the 90s stock bubble, with a note that asset inflation is the "good" inflation per just about everybody. i think the govt should recognize the bad aspects of asset inflation (malinvestment) and curb excesses by cracking down on credit availability at a much earlier stage in a bubble's development. but such vigilance is never popular till the horse is out of the barn. and those darn Wall Streeters are much more innovative than the bureaucrats and always a good ten steps ahead.