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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: stan_hughes who wrote (380)	7/16/2007 5:31:43 AM
From: Real Man	Respond to of 71447

Yeah, this was probably the real reason for the huge rally 7/12 boj.or.jp

To: stan_hughes who wrote (380)	7/16/2007 5:48:51 AM
From: Real Man	Respond to of 71447

It's funny how everyone is claiming BOJ has been so wrong handling their secular deflationary crisis, and praises the US Fed. Now, with the ratio of total debt to GDP in the US setting new record all-time highs every day, and the Fed's bubble maintenance policies, the lengthy painful adjustment may just be ahead of us? On top of that, record trade deficit pretty much ensures the Fed can't cut rates back to 1% once the troubles start without risking a serious dollar debasement. While an attempt is made to inflate the mess away (Ben has the printing press to fight deflation, so he said), clearly it's not working, and all this liquidity is moving into bubbles instead. The trade deficit is not coming down, the total debt/GDP ratio continues to increase. To claim inflating the mess away effort a success, the ratio of debt/GDP would need to come down. Now, maybe the Fed just needs to let these bubbles pop first, and THEN reflate?