<China Securities said that other Asian countries were concerned about the impact on the region's economy from the "irresponsible depreciation in the yen". >
That's funny! The yen was 250 to the $ in the mid 1980s. It reached a high of 79 in 1995 [when I was drooling at the prospect of borrowing yen to buy MSFT = would have been great, but couldn't find yen. It's middling now.
<... and here it comes, competitive devaluation, global deflation, currency crisis, government sponsored robbery, dishonor, disgrace, ... destruction of wealth >
Jay, I have waited for this since 1996 when I was discussing precipitous financial implosion and deflationary domino theory collapse with jfred [SI poster]. My dread was that it would all go with a bang and take me with it. I decided that it would NOT go with a bang and that Uncle Al would do just what he has done. When the implosion got going, and it was time for irrational exuberance to get its comeuppance, he printed flat out and lowered interest rates quickly.
In 1998 I thought we were going to get to see up close and real how it would go, but it was a fizzer.
Then, in Y2K, away it went and again, it was a fizzer. The hot air went out with a whoosh. Those without markets and profits were deflated. The process continued throughout 2001 in a gentle grinding down process. NO COLLAPSE, as expected.
The next part of my expectation, that is, competitive printing and devaluation, is underway. I expect initially there will be deflation, but inflation will not be far behind as borrowers are relieved of some of their debts by punishing of savers who loaned their savings in good faith, only to be cruelly abused by the creators and guardians of the currencies they hold.
Communities always find it expedient to steal from the thrifty, constructive and productive when times get rough. They usually do it by financial theft [money dilution in particular]. Outright 3D property theft comes later if things really get tough.
Anyone holding cash is going to regret it as their holdings are diluted. The greatest value remains productive enterprise where the goods and services are essential and especially so in recession and depression. Wheat, low cost transport, tobacco [a stress product], booze [a stress product], low cost foods, cheaper holidays, [tents instead of hotels], ammo and enterprises producing these, especially CDMA communications [QUALCOMM], will remain in great demand and increase in demand.
Products to celebrate the 1999 boom such as Dom Perignon, overseas holidays, new SUVs, new $1 million houses, first class travel, private aircraft, pleasure boats, nice hotels, fancy meals and designer clothing will NOT be major growth areas.
But this is just a glitch. The great human globalisation and technological revolution, CDMA and CDNA in the vanguard, are only in the zygote stage. Things are just warming up. We are NOT going to go into a multiyear era of atavistic regression to 19th century barbarism of warring fiefdoms. There is just a spot of tidying up needed after the irrational exuberance of the millennium celebrations. A rearranging of the deckchairs and who gets to sit in them.
For example IDT bought Winstar for a song. winstar.com The assets will stay in place. Both companies will keep functioning. Tough luck for those who did their dough. Globalstar and Global Crossing will have their assets go to the highest bidder, which will NOT make those who lost money the happiest campers in the village. But they'll go on producing the pixels, bits and bytes as they were designed to do, feeding the technology revolution.
Once the creditors and shareholders have been ground up sufficiently, the revolution will continue - that bit of roadkill will be a very minor speedbump in the big picture, just as the huge stockmarket collapse of 1987 has largely disappeared into the ripples of the every-upward graphs.
Everything seems to be going according to plan, except that my plans always seem to be two or three years ahead of when things actually happen. That's okay, better early than caught by surprise. Patience is more pleasant than panic.
I'm thinking there could be further USA sharemarket falls, before the inflationary bite kicks in, so maybe I need to hide a bit more cash in Happy Hobbit Haven [Kiwiland] and wait for the crunch.
Then, quite quickly, I think we will see the recovery as people around the world go about the business of improving their lives, which means buying the technological revolution and working to produce it.
Mqurice
Dow 16,000 Feb 2002 is looking unlikely at this late stage. But it's not that far away. We'll be there soon enough. NO collapse!! Musical chairs on the deck chairs and we'll be on our way, singing a happy song.... [this ship is NOT the Titanic - there is no iceberg... full steam ahead.... fuel that furnace Uncle Al... we want top speed] |
