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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 (75513)	12/13/2006 12:08:00 PM
From: John Vosilla	Respond to of 110194

'..for most folks in this country standard of living will go down sharply' That seems to be one point probably all of us here agree on at least for now and that includes me. But things can change. Given all the smartest guys in this room think that way, thinking as a contrarian, perhaps we are all going to be proven wrong longer term? Just look at what happened after the last Bush left office<g>

To: Mike Johnston who wrote (75513)	12/14/2006 1:47:45 AM
From: kris b	Read Replies (2) \| Respond to of 110194

"Economy is very large and complex" Everything you just said is totally irrelevant to my: So, it still boils down to the simple question how will the FED/Government get that money to the masses. Since you can't answer it I will help you. Lets get to the heart of the matter. This is how the consumer was reliquified ( for the chart of the liquidity flows go to piscataquaresearch.com, The Consumer Crunch Dec/06 Update. Page 6) over and over again during the last four years: 1. FED by mindlessly dropping the FED rate to 1% sparked the biggest housing bubble in US history. 2. As house price went (here is where the FED's helicopter drops went rather then into CPI. That is your hyperinflation) to the moon households monetized the gains, put that money into their bank accounts and supported their standard of living. 3. The housing bubble popped. With house prices (don't believe official propaganda that is only 3,5% , it is a lot more) dropping like a stone, and with mortgage market starting to tighten the credit availability, the funny money stopped flowing in 4. The households are on the ropes and one paycheck away from BK. There are three ways to reliquify them: - FED comes up with another asset class to inflate so households can extract $ 700 Billion annually. - Households cut spending - Households start liquidating assets. As the saying goes "one can't eat assets" Now, can you explain to me point by point how will FED reliquify the households so they can start shopping again, creating your hyperinflation in the process.