Just when you didn't think it could get any worse, there's also the fabled Y-2K problem that will cause capital investment spending by businesses to drop (most replacement purchases were done by late 1998 according to most U.S. companies) as they attempt to re-code their systems as well as possible supply chain failures from Y-2K "crashes" at numerous facilities around the world that will not be compliant in time.
Rarebird.. do us both a favor and don't bother posting anymore of this Gold-Eagle BS to me anymore. Post it to someone else.
I read that crap they wrote and just as I expected, they threw in the Y2K boogie-man.
But you and I know that if Y2K is an issue, it will be moreso overseas than here in the US where we've actually paid some attention to the friggin' issue at a national level.
The Europeans were absorbed in the minutiae of their Euro conversion programming changes, while Asia was dealing with their Year 1997-8 problems, otherwise known as the Asian Contagion.
Both seem woefully underprepared compared to the US, and both have more fragile markets and monetary systems, and both are either struggling to come out of recession, or avoid it.
So you tell me where people are going to put there money?? In economies that are struggling or in economies that are overheating DESPITE the ecnonomic woes overseas?
And don't forget the boogie men that lurk in those regions in the form of China and possibly a reactionary Russia. Look at Taiwan's market right now... and Thailand's... Looks like two years ago all over again.
The US is a safe haven for the very fact that we are surrounded by two separate oceans and are the worlds only mega-power. People pay up for that right to hold US assets exactly because of that strength.
It may change in several years, but our competitors have a lot of work to do first before that becomes the case.
Three more absolutely glaring errors in that article. The first was that the Japanese are trying to keep their yen strong. If that were the case, they would not have had to intervene several times over the past weeks to weaken the yen. A strong currency in a slow economy is a sign of weakness as it indicates that no one wants to spend anything. All they want to do is save ALL THEY CAN out of fear for the future. It is not a positive reflection of Japan.
The second is that the US dollar getting weaker would severely damage the US economy. On the contrary. The US dollar has been, I opine, kept artificially high in order to facilitate bailing out Japan and Europe until they could restructure. That pressure was too much and a correction was required. A cheaper dollar lowers the trade deficit while making our goods more competitive overseas. That will be good for earnings (unless every other economy collapses and can't afford to buy anything).
Number three is that the Japanese are the largest debtor nation, PER CAPITA and PER GDP, in the ENTIRE WORLD. They have more debt and unfunded obligations per person or as a percentage of their GDP than the US. And given that their economic strength has been due to the US sucking up their products with abandon, how will they repay that debt in the future?
If debt is so bad, I'd like to know why Japan is such a steal??
But one more point. The information age is upon us. Just like railroads increased productivity and efficiency of business during the 1800's, those economies without extensive IT infrastructures will be left in the dust behind the US. That is technology that we lead the world in, and that the rest of the world lacks. If they don't build it, they will be forever economically marginalized behind those nations who do.
There may be some ups and downs in our economy, but most of it due to the fact that other nations have screwed up their economies and put the US at their mercy.
This Japanese guy they quoted was one of the Bastards who CAUSED Japan's problems to begin with. I don't recall him bullying JAPAN's stock market when it was trading at 90 P/Es.
He's nothing more than one more Japanese politician/economist trying to save face for the failures by beating up on the US.
Screw 'em.
Regards,
Ron
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