SOS A Gary Shilling interviewed by Jim Puplava

1. Many are interested and participating in the mortgage loan;
2. Bubble give great opportunity, 3 factors, sth out of consencious, right yardsticks and right reason for the right call;
3. History never repeat but it rhymes;
4. Late 70s - disinflation instead of inflation (gold is money) - inflation peak at 1980
5. Inflation is normally results from big government spending
6. Housing bubble call, no money down loan & junk mortgage with AAA
7. Developing from 2002, housing bubble into 2005, the point is loose lending practices, regulation problems
8. Investors trusted rating agencies work hand in glove with wall street derivatives
9. Another notion is prices of properties never drop (since 1930)
10. Rating agencies got away with their actions
11. Wall street leverage from 20 times to 40 times (Lehman and Bear Stearn)
12. Slow growth ahead, consumer zeal to save, private sector cost cutting (over last decade)
13. New reality, Greece, Ireland, Portugal, (Spain?)
14. UK will be a show case, private sector loan decrease from 15% to -3%.
15. Stimulus is a control experienment, the multiplier is only 0.5 times instead of ONE or more time (save half and spend half of stimulus)
16. Protectionism arises from slow growth and high unemployment.
17. Free trade benefits the leading economy (UK in the 90s).
18. US, no help from anywhere.
19. Social contract to retire late.