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

To: GST who wrote (75815)	12/16/2006 2:41:44 PM
From: mishedlo	Read Replies (3) \| Respond to of 110194

Truly amazing Now we see a GST theory that says expansion of money causes low inflation The continued expansion of US money supply has allowed us to import disinflation, holding overall US inflation at low levels. Message 23107943 Gee why don't we just keep expanding money forever, thereby perpetually holding inflation low? Mish

To: GST who wrote (75815)	12/18/2006 9:51:11 AM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

Yes he was part right but way off on his main theme of a serious deflationary debt cleansing downturn within five years. Only the 'dreaded' deflationary consequences of cheap imports have kept long term interest rates too low and supported extended multiples to cash flow for many assets.. Our inflection point appeared to be around 2002 when the fork in the road had a very reasonable chance of tipping us into a deflationary debt cleansing spiral. We need much higher interest rates and a stronger dollar it seems to have any chance of that happening in the next cycle IMHO