Ron,
<<The DOW is manipulated by many factors, the most important of which in my perspective is the proliferation of large mutual funds over independent money managers and stock investors.>>
I agree completely - that's what makes it so unhealthy - it is not truly reflective of healthy economic growth. I think we agree here.
<<The US economy has been far too strong and productive, a
trend quite likely to continue and accelerate as the Baby Boomers continue to invest for retirement>>
The US economy has been driven by cheap imported materials to a large degree. IMO many of the efficiencies you are referring to are from abroad, as much as domestic.
The flooding of the world with US dollars, making it the defacto reserve currency, has also greatly assisted your economy. That is why the Euro and perhaps at some point an Asian equivalent, will provide an alternative.
<< I hardly see where making the Euro and Yen exchange rates less favorable against the dollar will assist their export oriented economies.>>
For the same reasons it has assisted the US economy, notwithstanding your balance of trade stinks and can not go on forever. Do you think other foreign economies want to give the US cheap materials forever .... that allows the US tremendous leverage over these other foreign economies ..... perhaps as a foreigner looking at the US from the outside, it is painfully too obvious to me.
<<Btw, why is $400/oz "healthy" when the average cost of production is supposedly in the $200's>>
This is a fallacy -- the CofP is based on high-grading over the last few years .. those reserves are not going to be available forever. While there have been technological advances in the last 50 years , there has not been many real advances in the last 15 years. Many of the new advances have been to deal with refractory ores that have been difficult to recover - and they are generally expensive. In addition, with the CofP quotesd in US dollars, as the dollar loses value, the CofP will increase too.
MB |
