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

To: John Vosilla who wrote (88761)	11/8/2007 4:35:34 PM
From: KyrosL	Respond to of 110194

I am wondering what will make long bond rates rise. There seems to be huge demand for bonds from countries that should be running huge trade deficits due to their huge investments, but are instead running huge surpluses. Their workers create a huge supply of goods, most of which are surplus and are exported, because of their huge savings rates. Their savings create huge demand for financial investment products, even our long term bonds with their ridiculously low interest rates compared to our inflation. That's a prescription for deflation in manufactured goods and low interest rates, at least until those countries learn to only save what they invest and consume the rest. Japan never learned to do that. Can we hope that China will?

To: John Vosilla who wrote (88761)	11/8/2007 7:29:47 PM
From: DebtBomb	Read Replies (1) \| Respond to of 110194

No....sorry, I disagree John. The baby boomer spending wave is about to fall off a cliff. There won't be much demand for anything except health care and wheelchairs for 78 million baby boomers. Supply and demand. Not to mention massive record debt. There will be a fire sale. Everything will be up for sale. 1990 Japan. 1929 U.S. Throw in peak oil as icing on the cake. There's already too much for sale, too much debt, and not enough money except to buy oil. No point really in even going into deficits, busted social security, medicare, and underfunded pension funds. Bernanke is getting ahead of the deflationary cycle with rate cuts.