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

To: Horgad who wrote (75535)	12/13/2006 2:24:44 PM
From: GST	Respond to of 110194

<Thats not exactly true> What is true is that we are faced with policy dilemmas at the national level and investment dilemmas at the personal level that require an understanding of what drives prices. In a global economy with international trade and investment the purchasing power of your currency will be very strongly influenced by things like your comparative savings rate, your balance of trade, your current account balance, your monetary policy and your fiscal policy -- to note the main elements. When you exclude all other factors except money supply, or worse when you choose to ignore all other factors either because you think they should be excluded as a matter of principle, or if you merely exclude them because you have it in your head that they don't matter or that they are just noise, then you will not be competent to talk about future price levels as these are being driven by fators that go beyond monetary policy in the US. Mish, and others here, are not competent to talk about future price levels for this reason. Without reference to price levels you will also not have a clue as to bond yields -- the cost of renting money. The minute you take prices off the table as the measure of inflation, you have exited this planet and exited any realistic discussion of the US economy and where it is headed.