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

To: Broward Horne who wrote (80259)	3/23/2007 6:00:56 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 110194

Giving something for nothing? How about nothing for nothing. Let's see, the foreign central bank, predominantly England, creates "money" (money because they say it is) to buy our IOUs which we promise to repay in "money" we create (money because we say it is). We are exchanging paper or digits for paper or digits. Its an illusion. Most parties offering something of value have long ago left the scene - except internally. Witness the people who previously owned their home and have sold it piece by piece with their "profit" (which is not actually profit but simply their same home measured by a shrinking yardstick). Now they own nothing, yet imagine themselves still prosperous. Once the reality of their situation occurs to them that their capital is gone (and this often happens all at once in herd behavior), this is the economic recession / depression. The end result is seen daily when comparing the value of our money with other things of value which are not part of this mutual back-rubbing club. But within the club the realization will occur mostly all at once. This debt bubble is what creates economic depressions. Money is lent on the basis of inflated home equity and spent. The loss ends up with either the borrower or the lender - either way the capital is gone. Economic depressions are the realization that capital has been previously destroyed - even though most imagined it was still there. Monetarists in their delusions, believe economic depressions are the result of a slow-down in debt creation and turn-over. They believe if they can just keep increasing total debt or monetary turnover (monetary velocity) that the loss of capital won't be noticed. In reality, this is all just a miasma obscuring the real economy and the real transfer of value or capital under the money-show. .

To: Broward Horne who wrote (80259)	3/23/2007 11:57:35 AM
From: John Vosilla	Respond to of 110194

'Foreign central banks represent an aggregate of investors, the population of that country. They will eventually tire of giving something for nothing' Perhaps the tipping point will be when they have more mature and advanced capital markets to support their enormous surplus? Or a continued relentless move down in the dollar from here? How can anyone short of those expecting deflation/depression expect a fed rate cut soon? The perverse side of all this is Wall Street loves continued weakness in the dollar and very low long term rates which is going to be impossible to balance out without severe disruptions.