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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: ggamer who wrote (77043)	3/29/2008 7:03:38 AM
From: SouthFloridaGuy	Read Replies (2) \| Respond to of 116555

There's plenty of oil, IMO, and global leading economic indicators are squarely negative. I don't think there has ever been a time in modern history where the price of oil didn't fall while global growth in the G7 was at stall speed. Why? Because high interest rates have catalyzed past recessions not bursting asset bubbles. Our first taste of asset bubble deflation was in 2001. Now we're seeing the real deal. This time the best excuse the authorities can give on oil is "Nigeria". But you'll be surprised, even Joe 6 pack understands what's going on now. Cheap money to bail out rich bankers is fueling commodities inflation. Plain and simple. When the sanctity of money is lost, the gig is up. The cost of money must rise either through deflation or tight monetary policy which will cause deflation. But deflation must occur. I would argue that with good government stabilizers - national health care, temporary national work/job retraining program, deflation is the LESSER evil. Otherwise we'll become poorer AND destroy our currency just like Zimbabwe. I see no winners in that scenario.