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Originally Posted by The Demon
What I have seen the past year has been a credit contraction for small businesses, while a credit expansion to consumers. I certainly do NOT see any kind of contraction in the money in supply, perhaps maybe a small contraction in the velocity of money.
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These are open to argument.
Consumer credit has declined precipitously since 2007.
M3 + credit peaked in 2007 and turned negative in 2009 and is declining. This is not inflationary. see chart at:
http://www.nowandfutures.com/key_stats.html
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T-Bills? I certainly hope my scenario doesn't pan out, because you'd be royally screwed. But I know some people with your school of thought that do the same thing, so we'll see. I have positions on natural gas and agriculture as well.
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Yes, if the US Gov't
defaults on its' debt I will be royally screwed. I won't be alone. Of course, this is unlikely to happen overnight if at all.
In my scenario, cash is king. Short-term T-bills are cash equivalents. I'm confident I'll receive the cash at maturity. I'll continue to roll them over. I'll do something different with that cash once we have run the course (to an extent more in alignment with where you are now). I'll also be buying certain stocks at this point as my scenario would place them at extreme discounts.