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

To: Skeeter Bug who wrote (100847)	1/27/2009 1:43:05 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 110194

Hawk, one of my reasonable scenarios is that inflation takes a while to show up I would totally concur. When we're looking at a potential $5 Trillion in loan defaults (presuming L Shaped recession like Japan) and at least $2-3 Trillion in defaulted loans by 2010 regardless, it spends destruction of money supply. And so long as money supply is stagnant due to default destruction and diminishing velocity, we're clearly not in an inflation mode. However, once any economic recovery catches fire, the Fed's going to need to scramble to drain that liquidity before it causes hyper-inflation. Hawk