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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: nspolar who wrote (7509)	1/7/2007 9:05:22 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 33421

Bottom line is if the US consumers turn from big spenders to savers, a lot of markets will do more than catch a sniffle. I would think a lot of hot money would rapidly disappear. I've always been of the belief that Americans concept of "savings" is defined differently than traditional perceptions. If I'm buying stock instead of putting that money in a savings account, I'm investing it with the hope that my asset will grow in value. And if the stock market collapses from a bubble caused by excessive money supply, then I throw my money into bonds.. And when those bonds achieve interest rate parity with the Fed Funds rate, then I throw it into real estate.. And when the real estate bubble is popped, and the bond market is overpriced, I have to decide if I want to go all cash, or begin the cycle anew by re-entering the stock market.. Of course, if I'm one of those Americans who used a adjustable rate mortgage in order to buy that over-valued real estate, then I'm screwed until I can cast off those mortgage payments. I don't know if this reflects reality, but my perception is the the big pools of money constantly shift to where those "savings" have the best chance of growing in value. Please correct me if I'm incorrect. Hawk