7 replies to this topic

[ogm]

Is there something on the horizon that can put a big dent in the Goldielocks and the perpetual rally ?

Possibly.

Long term interest rates are in a very suspect spot. If they break out upwards out of this triangle, the whole new bull market in yield may have begun.

Mountains of debt will start coming home to roost.

[denleo]

The problem of "Mountains of debt" will be solved by The FED and US Treasury building bigger mountains of debt. This is not even a discussion any more. That is the fact of finance. Buy every pull back in stocks. Denleo

[jjc]

The problem of "Mountains of debt" will be solved by The FED and US Treasury building bigger mountains of debt. This is not even a discussion any more. That is the fact of finance. Buy every pull back in stocks.

Denleo

Speak of the devil:

Operation Date: 04/20/2007
Operation Type: Outright Coupon Purchase
Release Time: 10:34 AM
Close Time: 11:00 AM
Settlement Date: 04/23/2007
Maturity/Call Date Range: 05/31/2008 - 01/15/2009
Total Par Amt Accepted (mlns) : $1,879
Total Par Amt Submitted (mlns) : $12,873

[ogm]

The problem of "Mountains of debt" will be solved by The FED and US Treasury building bigger mountains of debt. This is not even a discussion any more. That is the fact of finance. Buy every pull back in stocks.

Denleo

Here is the problem with that.

The mountains of debt are being bought by foreigners, who are in a precarious position, holding this low yeilding paper denominated in detiriorating currency. the US dollar.

As China and Asia get economicaly stronger, the standing of the US dollar will keep declining toghether with its value. The potential buyers of the new mountain of debt may start demanding higher interest for their efforts to offset the risk or erroding dollar. I wouldn't be surprized if the combination of falling dollar and new debt issuance will be the base of the new bull market in yields.


Now as for stocks, its hard to say how they will react to rising interest rates. Though historicaly rising interest rates weren't a good environment for stocks.

Edited by ogm, 20 April 2007 - 11:57 AM.

[Cirrus]

The problem of "Mountains of debt" will be solved by The FED and US Treasury building bigger mountains of debt. This is not even a discussion any more. That is the fact of finance. Buy every pull back in stocks.

Denleo

Here is the problem with that.

The mountains of debt are being bought by foreigners, who are in a precarious position, holding this low yeilding paper denominated in detiriorating currency. the US dollar.

As China and Asia get economicaly stronger, the standing of the US dollar will keep declining toghether with its value. The potential buyers of the new mountain of debt may start demanding higher interest for their efforts to offset the risk or erroding dollar. I wouldn't be surprized if the combination of falling dollar and new debt issuance will be the base of the new bull market in yields.


Now as for stocks, its hard to say how they will react to rising interest rates. Though historicaly rising interest rates weren't a good environment for stocks.

Here's the deal...the entire world is on a FIAT currency system. If the dollar, the currency which most goods and resources are traded in, depreciates----it gives those nations (China, Russia, Japan, S Korea, India, etc) holding the dollar a license to print more of their own currency as their economy will grow without excessive inflaitonary pressures. The more dollars/weaker the dollar the more potential for runaway world growth.

There's plenty of money out there. Buy the weekly charts of stuff that's supportive of world growth. They are flat out working.

[Trend-Signals]

weak USD pro-con
http://www.chicagofe...weak_dollar.cfm

CRB trading below trendline support.
http://stockcharts.com/c-sc/sc?s=$CRB&p=D&yr=0&mn=11&dy=0&i=p38583385896&a=90444715&r=324.png

Edited by Trend-Signals, 20 April 2007 - 12:11 PM.

[pdx5]

The only problem with "debt" is....it has to be paid back WITH interest. Oh yes, with the average 2 offers in the mail every week for a new credit card, I am thinking about using all of them and live a very prosperous looking lifestyle. Until that is...the time when the minimum monthly payments exceed my monthly income. Hey...might as well go out in style

[Cirrus]

All debt is not payed back--it's 'supposed to be'. There are bankruptcies and defaults everyday. It's no coincidence that inflation usually coincides with rapidly growing issuance of gov't debt and thus money creation. There's a big multiplier for every billion created with a fractal reserve banking system.