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

To: Mike Johnston who wrote (89811)	12/22/2007 9:08:37 AM
From: westpacific	Read Replies (1) \| Respond to of 110194

December 17 – Bloomberg (Rich Miller): “The world economy is facing the risk of both recession and faster inflation. Global growth this quarter and next may be the slowest in four years, while inflation might be the fastest in a decade, say economists at JPMorgan Chase & Co… ‘What lies ahead is a period of stagflation -- slow or no growth combined with rising inflation -- in the advanced economies,’ says Joachim Fels, co-chief global economist at Morgan Stanley…” In Addition this is a great read on the global inflation problem with tons of charts showing how it is MZM Money Supply that is driving this animal.......... We are not talking just US Hyperinflation anymore! sirchartsalot.com ------------- West

To: Mike Johnston who wrote (89811)	12/24/2007 10:48:27 AM
From: John Vosilla	Respond to of 110194

Brilliant piece. Unfortunately Schiff gets trashed as just another loonie crying 'the sky is falling' whenever he appears on the financial channels. Those clowns interviewing him can't understand it is not a bull/bear debate anymore as much as what fork in the road we take to get us out of the mess the deficits, housing/credit bubbles and collapsing dollar have put us in the past five years.. Nominal GDP could triple in the next decade, interest rates could double and the broad stock market averages go sideways..

To: Mike Johnston who wrote (89811)	12/24/2007 10:54:48 AM
From: John Vosilla	Respond to of 110194

You dared to venture into the hornet's nest? I can't wait<g> Message 24158077

To: Mike Johnston who wrote (89811)	12/26/2007 2:10:15 PM
From: John Vosilla	Read Replies (3) \| Respond to of 110194

Schiff responds on rebuttal by Mish's blog. Mike what I can't get is if we get this high inflation like the 70's, not necessarily even your hyperinflation, that property prices wouldn't rise at a nice clip along with everything else you need from wages for services, rents, commodity prices, food, energy, basic infrastructure for modern living ect.. Demand pull and cost push working on overdrive just like 1975-80 as society adjusted to higher rates.. Much lower multiples to cash flow puts a lid on asset prices is the counterbalance to all that is coming.. <<A few quick points (part 1) 1. I believe that eventually long-term interest rates will head much higher to reflect significantly higher inflation expectations, particularly here in the U.S. where a lack of domestic savings in the absence of willing foreign lenders will put even more upward pressure on rates. 2. Any credit the Fed provides will be spent. It is not necessary that the banks that originally borrow it loan it to Americans to buy houses or U.S. businesses to buy equipment. They can use it to buy oil, gold, wheat, foreign currencies or invest in foreign dividend paying stocks. As long as the Fed enables banks to borrow dollars below the rate of inflation, they will borrow all they can and invest the proceeds in appreciating or higher yielding assets. Then those dollars will be spent into circulation bidding up consumer prices. Like this comment? [yes] [no] (Score: 6 by 10 votes) Peter Schiff Monday, December 24, 2007 2:55:16 PM [delete] A few quick points (part 2). 3. Yes, all currencies are troubled, but the dollar is unique in that the American have borrowed so much money that we can not afford to repay, and have a phony economy that can not function without access to low cost imported products and foreign vendor financing. In the coming crisis, the U.S. will enter a serious recession; the dollar will fall sharply, sending both consumer prices and interest rates soaring. There will be wide-spread unemployment, and assets prices, such as stocks, bonds, and real estate will fall (if inflation gets out of control, stock and real estate prices might rise in nominal terms, but in that case their real declines will be even greater.) I can assure anyone that if they think they can ride this out is in U.S. treasuries or by stuffing dollar bills under their mattresses, they will be very disappointed. Just ask anyone in Zimbabwe who might have reached a similar conclusion. My commentaries are kept short for a reason and are never meant to constitute a complete argument. For a fuller explanation of my position I suggest reading my book, “Crash Proof.” Peter Schiff Monday, December 24, 2007>>