The idea that the current hyper-liquidity would not filter down into prices has been debunked by recent inflation numbers...
Bernanke simply will not get a "pass" on cleaning up the massive money printing mess of the Greenspan Bubble years...
A lot of that liquidity is now in the M&A markets... But soooner or later it will slosh back into commodities...and prices in general will rise.
IT SEEMS THAT HIGH GAS PRICES FROM THIS SUMMER ARE FINALLY STARTING TO "HIT" THE REAL ECONOMY!
THERE IS ALWAYS A DELAYED REACTION TO AN OIL SHOCK... IT'S KIND OF LIKE A TSUNAMI WHERE THE WATER SEEMS TO BE RECEDING...BEFORE THE DELUGE!
My hunch is that Bernanke will be defending the dollar for ALL OF 2007... AND THIS WILL END THE ASSET INFLATION ONCE AND FOR ALL...
INDEED, WE ARE ALREADY SEEING THE CONSEQUENCES FROM THIS IN THE HOUSING MARKET...
ECONOMIC CHANGES SIMPLY DON'T HAPPEN "N'SYNC" LIKE IN THE TEXTBOOKS...THERE ARE ALWAYS DELAYS, LATENCYS, AND A CERTAIN "STICKINESS" IN ECONOMIC DATA...
THESE DELAYS AND LATENCYS OFTEN MISLEAD PEOPLE INTO THINKING "THE WORST IS OVER" WHEN IN FACT...THE WORST HASN'T EVEN STARTED YET...!
THE WORST WILL BE VERY APPARENT IN 2007...AND BEYOND.
WE ARE IN THE FINAL CHAPTER OF THE BUBBLE DAZE ON WALL STREET...
