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

To: Crimson Ghost who wrote (82732)	6/14/2007 7:14:30 PM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

'Conclusions Without The Hyper It is entirely possible that as quickly as the ‘bond bear’ threat has reappeared an unexpected blow-up in the markets will transpire to make this threat disappear. If such a change in investor focus can happen in a semi-orderly manner there is also the possibility that some of the excessively large piles of liquidity in the financial markets can be salvaged. With that said, it is highly unlikely that all asset classes will exit the immediate inflation/interest rate threat unscathed. For a brief while - and on a global basis - stocks, bonds, real estate, and commodities all attended the same party, but it increasingly looks like this party has unceremonious come to an end. The only question is which partygoer(s) are about to leave the party... Incidentally, with deflation the one threat not on the horizon, the other very extreme scenario to consider is that of hyperinflation. While a deeply statistical journey into U.S. government finances are enough to give any historian nightmares, the reality is that the global economy must assert its independence from the United States before the possibility of hyperinflation comes into view. And although this shift is indeed underway, the rest of the world is still not even close to being ready to run out the dollar. For that matter, the most important in/stag/hyper-inflation monitor around – gold - isn’t suggesting any hyperinflation threat (as for the contention that gold is (still) being manipulated by central banks, ironically this is akin to agreeing that fiat backed inflation is still under control). In short, as painful as a bear market in some or all of the four assets classes listed above might seem, it is nothing compared to the hell that will be unleashed when the world finally kicks its dollar habit. On the plus side, even U.S. dollar denominated utility stocks would be worth the risk if prices decline by 42%.' Nice summary.. No doubt housing has left the party first. Protecting the dollar and minimizing inflationary concerns now seems more critical with stock market averages at high levels and global economy doing well..