The Epic American Credit and Bond Bubble Laboratory

To: glenn_a who wrote (86701)	9/20/2007 8:25:17 PM
From: Joe Stocks	6 Recommendations of 109991

Chairman Bernanke just answered Texas Representative Ron Paul's question about the "moral justification" for devaluing the US dollar, by saying that the "value" of the currency can also be measured by what it can buy domestically, and so the Fed will watch the inflation rate and "make sure" that inflation is "under control." In other words, by ignoring the question altogether and answering it with a non-sequitur; the Fed will continue the policy of devaluing the dollar by creating inflation to help combat inflation. FWIW, From Minyanville.com buzz and banter

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To: Riechers who wrote (86664)	9/20/2007 8:42:55 PM
From: Lazarus_Long	6 Recommendations of 109991

The American gov't did more damage to the United States in one day than the USSR did in 70 years. It cut interest rates 1/2% to help fiscally irresponsible lenders and borrowers. It increased the amount of debt (read housing loans) Freddie Mac and Fannie Mae can take in by 20%. Savers will earn less on their savings and have less incentive to save. The Canadian $ is now at par with the US $, a position it has not held since 1976. research.stlouisfed.org (Sorry, Canadians, this really isn't meant as a shot at you. Look at it as a reward for having more fiscally responsible gov't.) Following that, the prime rate went over 20%. research.stlouisfed.org And 1-year treasuries went over 17% research.stlouisfed.org along with 30-year mortgages research.stlouisfed.org These high rates reflect a high inflation rate. Oil is over $80/bbl. stockcharts.com pushing up transportation costs. And the US$ continues in free fall. quotes.ino.com pushing up the price of everything imported--which seemingly is everything, now. Gold is at US$725/oz. marketwatch.com or is it $734? kitco.com Can massive inflation be far away?

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To: Lazarus_Long who wrote (86711)	9/20/2007 9:14:36 PM
From: bobcor	of 109991

It looks the the stock markIt is now pushing anyone with primarily dollar-denominated revenues but non-dollar inputs into downtrends. With the dollar being sacrificed and real economic activity in decline, domestic transport companies are really getting squeezed on both sides: weaker revenues and rising fuel costs. Same for airlines it would appear. The Dow stocks seem pretty immune, though. Several with lots of international sales and little in the way of input costs to worry about. I'm interested in suggestions of companies that will be hurt worst in a weak dollar environment - they seem to be the no-brainer shorts. They go down if the e-con-o-me tanks, or if the dollar continues to be weak. They're in a lose-lose situation. Anybody see any others besides trucking and airlines in this predicament? Perhaps big retail - like WMT? BC

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