Zeev's Turnips Patch-No Politics (ZEEV)

[jdaasoc]

I was about to reply to your post about liquidity when "FED poll" blew into town.

You said

the predictive value is non important, presence of such liquidity is on important drive in rising prices

I hope just about everyone will agree on this fact and when you combine it with the large deficits coming to roost, there is no other end game possible but higher rates. Weather we end up with that 70's thing where interest rates go double digit which only came about because of oil embargo, governmental confidence crisis on top of aging WWII generation, I doubt we will see anything like it due to increased productivity and health standards but I think someone going to get squeezed out at the trow if everyone in the global economy seeks more credit to grow world economy.

Federal reserves is worried about everything from gasoline consumption to debt levels. If the Chinese are getting let say ten billion a month in US dollars in excess of their ability to import foreign goods, some of those dollars are going into cars that will need gas. The competition for goods such as energy is already heating up and we in US are coming out on short end of stick. As long as I see HNP growing electricity production at 80% per annum the pressure on energy prices is not going to abate.