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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (91479)	10/6/2007 10:56:35 AM
From: Hawkmoon	Respond to of 306849

That 4k job loss was reported to give Ben an excuse to cut. Now it's revised drastically upwards and more in line with what was the consensus. Oh.. I see.. Sorry.. missed that part of the conversation.. I'm about 600 posts behind..;0) But either way, the Fed chose inflation over recession. A recession would spread globally. Asia needs us to buy to support their growth and we need their money to support our war. Well, I think the primary villain for global inflation in commodities is China. And that's going to go on for the foreseeable future.. at least until China suffers a economic downturn. And yes.. recession in the US would turn global, I fear.. Been that way for decades, given our share of global GDP. But as to needing their money for "our war", I think it's the other way around. Imagine where our Government 10/30 year bond interest rates would be if we weren't issuing more debt to give the Chinese a place to park it? They would be much lower, and the RE bubble much higher. Objectively speaking additional T-Bill issuances provide a pressure-release valve in the face of Chinese monetary manipulation. But more to the point is that China just does not have an adequate banking system that can handle all the excess cash they are generating. And investing in US T-Bills at the rate they are is obviously creating "issues" in the global financial system and skewing the fundamentals. And apparently many Chinese businesses and speculators are buying $HK, pegged to the USD, and then using the funds to fuel their own RE bubble in China.. Thus, some folks, like John Pitera and John Mauldin, are betting the $HK dollar is going to climb in value to stifle this "internal" carry-trade that is going on in the two currency Chinese financial system. Message 23937203 Message 23927486 Message 23917173 Hawk