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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Mike Johnston who wrote (86571)9/19/2007 5:29:11 PM
From: GST11 Recommendations  Read Replies (2) of 110054
 
Actually, Mish has never come close to grasping the global dimension of the US economy, and so his deflationary "assessment" is made in a vacuum. Not only are we not in a deflation, we are embedded in an inflationary cycle that threatens to spin out of control as the US economy slows and the dollar falls. Housing is not the bubble to worry about -- it is the pinprick -- the balloon is the dollar, and as the air comes out of the dollar, the odds of "deflation" are extraordinarily low. The mother of all bubbles is the dollar -- and the dollar is the essence of runaway inflation. Housing prices can go to zero and not change this one bit -- on the contrary, the bursting of the housing bubble weakens the dollar and adds to inflationary pressures.

Mish is myopic and as a result has it all backwards, and that is why following his "advice" would be unhelpful.
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