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

To: KyrosL who wrote (88000)	10/26/2007 9:08:37 PM
From: Giordano Bruno	Respond to of 110194

Citi sticks their hand in the cookie jar one more time federalreserve.gov FED responds with cleaning instructions federalreserve.gov Treasury sponsored Moody's protected

To: KyrosL who wrote (88000)	10/27/2007 12:05:57 PM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

'..the more dollars the Fed is creating, the lower the long bond interest rates will go, since all these dollars increase the demand for long bonds' I remember that one from MacroEconomics 101..you can print dollars and monetize the back end to keep rates artificially low in the near term but inflationary pressures build down the road thus eventually raising rates higher. Now this was before supply side, endless deficit spending economics and the Laffer Curve became part of public policy in this country. We have no precedent to today as it appears all industrialized countries have no choice but mutually monetizing the back end of their curve in order to keep the dollar from depreciating faster..All this creates even more inflationary pressures worldwide on the back end of all this.

To: KyrosL who wrote (88000)	10/27/2007 3:49:44 PM
From: GST	Read Replies (1) \| Respond to of 110194

<the more dollars the Fed is creating, the lower the long bond interest rates will go, since all these dollars increase the demand for long bonds> That is precisely what has happened -- and it is only subject to the willingness to hold dollars. The glut is so huge that renting a dollar is still cheap. On the other hand, the willingness to hold dollars is declining - and so you are seeing the dollar drop even as the long bond holds relatively steady. The long bond is not telling the inflation story -- the foreign exchange market is blaring it at 130 decibles. You can stay deaf to it as you prefer, but you will be completely ignorant of the tremendous inflationary trend that comes along with a sharply lower dollar.