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

To: russwinter who wrote (75901)	12/17/2006 8:40:07 PM
From: kris b	Read Replies (7) \| Respond to of 110194

"I'm not really making any predictions on how it plays out. I'd rather watch them like a hawk." Neither am I trying to predict anything. I still don't know whether it will be a deflation or inflation. All I am trying to do, is establish the early signs/data of either and position myself accordingly. I am trying to understand how can FED reliquify households so they can prevent a recession or worse. To have a fruitful exchange of ideas, first we have to establish an intellectual framework. Otherwise we will be going around in circles, one talking apples while the other one is talking oranges. I was trained to pursue logical and focused line of thinking, so lets establish some guide posts. 1. Who is the engine of the US economy (according to the latest stats households/consumers account for 90% of the economy if you include housing)? If it is not the consumer who else has the buying power of the same magnitude/size? 2. If it is a consumer, does the consumer have the financial means/borrowing power to accelerate the consumption of goods and services from here or not? 3. If it doesn't how can consumer obtain new/money-buying power? 4. Liquidating assets like bonds; stocks doesn’t constitute new money. 5. New money/buying power is higher wages and/or new borrowings (where is the new asset bubble that HOUSEHOLDS can monetize to fuel their consumption. It should be at least the size of the receding housing bubble, otherwise there is not net addition of funds to the Ponzi unit) 6. We have two economies. Real, where goods and services are produced, this one is slowing. The second one, is a financial/phony/artificial economy where parasitic Pig Men shuffle the paper. This doesn’t contribute anything to the real economy and is still raging out of control. 7. We have two inflations. First CPI, PPI (jury is still out whether it will be increasing or decreasing), and the asset inflation (hyperinflation by my account is the order of the day). 8. Will the real economy slow down enough to pull the financial/phony/artificial economy down with it or not? Can we now have a meaningful discussion ? And facts or hard data only please.

To: russwinter who wrote (75901)	12/18/2006 5:43:53 AM
From: Mike Johnston	Read Replies (1) \| Respond to of 110194

Somebody once said, that hyperinflation takes one generation to develop and one generation to fix. If we assume that current inflationary cycle started in 1993 when the Fed started rapidly inflating the money supply, then the hyperinflation and replacement of the dollar could occur anywhere between 2015-2020. Things that could accelerate this process: 1. The internet and widespread access to many sources of information. 2. Globalization and the internet contribute to the ease and speed of moving large sums of capital into different countries, asset classes and currencies. 3. Asians pulling the plug on vendor financing. 4. An unforeseen event like wars in the Middle East spinning out of control, or major droughts, floods or climate changes. 5. Peak Oil. 6. More people reading "The Epic American Credit and Bond Bubble Laboratory" message board -g- Factors that are slowing down this process: 1. Financial and math illiteracy of most Americans. 2. Continued manipulation of economic statistics and "Ministry of Truth" propaganda. 3. Inflationary policies in Europe and Asia.