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

To: Real Man who wrote (76332)	12/21/2006 1:47:25 PM
From: Rarebird	Read Replies (1) \| Respond to of 110194

>>Their main goal is....to avoid the outcome of bursting bubbles at any cost, which could and will lead to more printing. They sure created a monster of a bubble-driven economy in the process. << Why do you blame the central bankers for letting valuations get out of hand when the real reasons are ones which are actually factors which central bankers are not directly responsible for? First of all, central bankers are not tasked with a goal of preventing bubbles. Their usual mandate is to maintain stability of the general price level (low inflation), a low unemployment rate and/or a stable currency exchange value. Recognizing and pricking bubbles does not fall within their mandate unless the bubble threatens one of their primary goals directly. Recognizing a future danger and reacting to it, in fact, often leads to severe criticism by politicians and the general public, who do not perceive future threats as important to act against in a pre-emptive way.

To: Real Man who wrote (76332)	12/21/2006 3:40:54 PM
From: bart13	Read Replies (3) \| Respond to of 110194

No question that something will go pow, and I have as little clue as anyone on when and how. I do hold out the possibility that we'll have a short term deflation just plain due to all the over the top leveraged idiocy getting out of control... but I'm sure not going to bet the farm on it, and will continue to add to a hard asset position on balance. My overall view is that we're indeed heading for hyperinflation. I slightly favor the Argentinian scenario but with the "volume" lower in the sense that the US won't have an almost overnight drop of 70%+ but rather it will come in 2-4 steps over a few year period. Amen on primarily the Fed having created a monster of a bubble-driven economy, and having led much of the western world down the same merry path. sigh It sure seems to me that the probabilities of a break are very high in the next few weeks. I even sent out a warning to some friends. To have had the amount of coupons passes we've had lately and with the Treasury having added about $46 billion in TIOs in just over a week, the markets being almost even is a very large warning flag. Its not what I expected.