re: Things such as the potential for China to eventually move
"it may actually prove to be positive for US market since potential market in china is huge."
>>> Answer depends on 'who's ox is getting gored'. Over the next - say - 20 years or so, can we agree that China is likely to remain the world's largest 'lowest cost manufacturer'... and continue to 'export' deflation in manufactures?
re: Growth rates in the EU being so anemic.
"In the near future only Euro would be able to compete with $. There is always high risk associated with asian markets and that in turn affect the currency."
>>> <G> There is also risk in remaining weighted in a nation's currency that runs huge structural trade and budget deficits, has no real savings rate... and attempts to 'finance' itself by running the printing presses, while remaining 505 reliant on foreigners to purchase it's bonds.
re: crowding-out
"should not it manifest itself through high interest rates?"
>>> Yes, of course. (As I also said: demand for financing must be high as well... presumably from BOTH Government AND business. If business does not expand, than the day of 'crowding-out' effect would be delayed.
"As you pointed we are close to the magic numbers and no sharp increase in rates yet."
>>> Not so far off... I predict 1st. Q '05 we will move within range.
re: long bonds in major bear over past year & long rates rising, commodities rising, especially base and precious metals...
"nothing that was not expected and to be honest I personally expected much much worse"
>>> Perhaps a trend with legs, though....
re: >>> Now add in war and a bitter divide in politics, and the possibility for exogenous shocks to the system.
"can not imagine any shock to the system that would be close to 911."
>>> I can. Financially, 9-11 fell within historic 'norms'... nothing like the '70s oil crunches (which we are even more vulnerable to now.)
"I think Bush is doing the right thing"
>>> Some right... some wrong.
"In general I belive in free market approach. Things tend to balance out...."
>>> Yep... now how about a little of that 'respect for free markets' in the reform of our creaky, antiquated, overly-complicated and loophole-ridden tax codes? |
