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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 (77934)	1/21/2007 2:46:54 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

<Russ still seems to believe the markets are free, despite ample evidence to the contrary.> Oh? hardly.

To: Real Man who wrote (77934)	1/21/2007 5:50:33 PM
From: GST	Read Replies (2) \| Respond to of 110194

<Ultimately it will be the dollar that will crash, leading the crash in bonds and stocks, and the myriad of leveraged derivatives.> This is spot on -- what I cannot understand is why anybody would view this event as a reason to anticipate lower prices in dollars. This is next to impossible. The collapse of the dollar means higher prices in dollars. If the dollar does collapse, inflation goes through the roof.

To: Real Man who wrote (77934)	1/21/2007 6:47:59 PM
From: Crimson Ghost	Read Replies (2) \| Respond to of 110194

In our crazy bubble world some basic laws of economics have been (temporarily?) turned on their heads. I can still remember the days when plunging oil prices and resultant lower inflation was good for bonds. But no longer. Now lower oil prices mean OPEC has less cash to invest in bonds -- hence the recent weakness. Another example of how fundamentals now matter much less than financial supply and demand in a bubble oriented world. If oil drops to $40 will TNX yields surge over 5%?

To: Real Man who wrote (77934)	1/21/2007 8:22:05 PM
From: Mike Johnston	Read Replies (2) \| Respond to of 110194

Ultimately it will be the dollar that will crash, leading the crash in bonds and stocks, and the myriad of leveraged derivatives. For a credit system backed by the full trust in the Fed that creates the paper dollars, this is the only way. In the end, the only way the Fed can intervene in the markets is by creating new dollars. The game will be up, when those new dollars will not be accepted as a medium of exchange and a store of value. At that point the Fed will be made irrelevant and the long , painful adjustment process will begin. The product of the Fed's printing press will only be good for burning in stoves for heat, if anything. When you abuse it, you lose it. The longer the Fed abuses its power, the closer the day they will lose it.