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

To: XoFruitCake who wrote (113108)	3/27/2008 2:08:14 PM
From: Tommaso	Read Replies (2) \| Respond to of 306849

Your alternative was the necessary consequence of my first alternative. By the following steps: A. destroyed dollar (75% or more loss of value) means inflation rates of 20% per year or worse. B. Such an inflation rate compels international interest rates on dollar-denominated bonds to rise to similar rates. C. This is ipso facto destruction of the longer term (five years or more) credit markets. If the Fed tries to regain control a la Volcker, it destroys the equity markets. If it lets inflation run for several years, the stock markets may at times show a morbid, feverish, excitement. What I really meant is that there appear to be no good choices left for the Fed. The last chance Bernanke had was simply to hold the Fed funds rate at about 5% and let the chips fall where they might.