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

To: Little Joe who wrote (99975)	11/27/2008 9:44:13 AM
From: Hawkmoon	1 Recommendation Respond to of 110194

Given that many consumers are tapped out and can't afford to borrow anything, I've been hearing that consumers were tapped out for the past 8 years or more.. So I kind of have to take that argument with a grain of salt.. But unemployment is a totally different beast. There's no budget when your only check is a measly $300 a week and your mortgage is $2000/month (which I imagine is a fair average). But keep people employed with a middle class wage and they'll find the way to cut out discretionary spending and pay down their debt, even if paying a bit above their minimum payments. Their other choices are BK, and or credit counseling (which, along with debt collection, is going to be a surging industry). I don't believe so much in stimulus checks. It would be better to just make it a permanent tax cut so people could factor that into long-term budgets, rather than a short term "oh.. here's your money back" scenario. Certainly our corporate taxes, in comparison to major competitors in Asia, are too high. As for hyper-inflation? Not so sure about that anymore. I think we're more vulnerable to a continuing global deflationary spiral where money supply (debt) is being destroyed in a wholesale manner. But that inflation could definitely occur after we have an indication that asset and commodity prices are bottoming out. And I think we'll be happier to see inflation than deflation. We're essentially precariously balanced between two highly undesirable results, deflation and inflation. But inflation is more readily containable than deflation, IMO. People's psychology reacts differently when they fear that the value of a home, or other major investment they purchase is going to immediately deflate in value. They'll just wait engage in a buyer's strike, as they are right now. Hawk