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

To: DebtBomb who wrote (88737)	11/8/2007 4:05:17 PM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

Dale I've been hearing that this entire decade now and especially the past three years.. We are going through an enormous repricing of select asset values as we speak. Cleanse the debt, start with a clean slate, monetize the back end and reflate. Financials are taking the biggest hit from this and not J6P. He is getting hit with not being able to keep up with rising costs.. Actually a crash in bond prices with much higher interest rates would dwarf what is currently taking place in asset repricing. The biggest fear IMHO is long term rates backing up in rapid fashion at some point in time from all the prime pumping and deficit spending. Actually fearing deflation is almost laughable at this point as we had events like that in 1990-91 and 2001-02 and Bernanke's job would be a cakewalk if that was the big fear..

To: DebtBomb who wrote (88737)	11/8/2007 4:16:53 PM
From: GST	Read Replies (1) \| Respond to of 110194

<How do you get out of a debt bubble? This is the question.> Inflation... that is how. You default -- with the enormous portion of our debt now owed to foreigners due to our inability to finance our own deficits, we are defaulting which means you trash the dollar. In Japan in 1990 it was the opposite -- for them the issue was not debt, they had the biggest stockpile of money in the world. Nor were they worried about a weak yen -- on the contrary, they feared the strength of their currency due to the huge current account surplus. Our problems are the exact reverse -- we have no savings, huge debts and a massive current account deficit along with a pathetically weak currency. Deflation is a real longshot -- it is just not consistent with our situation at all. Inflation on the hand is all but assured -- the only real question is how bad that inflation will get. For very good reason, there is concern that our inflation is about to spiral out of control.