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gtober

05/10/05 2:35 PM

#285 RE: AnderL #278

AnderL. Consider your hyperinflationary scenario. Do you think it would be very undesirous? I wonder if the FED in particular - and perhaps other policy-makers - would like to re-set the clock on this. It would pull us farther away from deflation, and would allow these same policy-makers to combat the excesses in the economy in more conventional ways again.

I am not so sure these policy-makers are that set against an inflationary spike, even if it has consequences to the economy.

Consider this, and let me know if you think it could be possible. The 'bubble years' for want of a better term, began with the stock market and has now moved on to real estate. IMO, it's all part of the same liquidity bubble. What if this liquidity bubble finally lead to general price inflation instead of specific asset price inflation. Would the FED finally get what it wanted, and turn off the tap?