NOT NOW ... but SOON ... dont you love it?
so much depends on the unsustainable continuing
and market forces wreaking havoc when that happens
hey, got a quick one for you, Mike
last August Kurt Richebacher and I got into one of our (perhaps 10) arguments
they were peaceful, except for 2-3, where he was also wrong
he insisted, pounding the table, that the Bank of Japan could not, would not, and will not allow the JYen to rise above 87
"the consequences would be disastrous to their export economy, and will never happen"
I disagreed, for reasons I state usually here
1. big trade surplus with USA
2. almost as big a surplus with China (pegged)
3. some resolution of bank problems in last 5 years
his premise was exactly the same as yours
the damage would be too great, so it wont happen
WRONG !!! I was right within 40 days
now the Japanese export business is threatened
I expect a JYen move to parity this year
that should roil their entire economy
but wait!!! the outcome was harmful
this time, the bond market will crack within 400 days
or will it surprise us by cracking within 3-6 months
we will see
I expect surprises
I expected a nice bounce off JYen 89 two weeks ago
we got it
but I did not expect to hear the BOJ backing off
I suppose using up $100B in two months might go a long way toward depleting their budgeted $400B Squander Acct to hold the FOREX dike
the other big argument KRich and I got into was overcapacity
he looks at net investment (investmt minus depreciation) in the aggregate
I maintained that telecom generally suffered from massive overcapacity, esp cell phone expansion and integrating portions of fiberoptic, with plenty of missing gates
he pointed to aggregates, yelled at me, and sounded like a spoiled brat who was caught in an untenable web
if you are wrong, have no info in component detail, then yell and create a bluster, rely on your reputation, and intimidate the opponent
kind of sad really
of course telecom had overcapacity, with 100 bankruptcies of major/minor businesses in 2000 and 2001 alone
has anyone noticed cellphone and longdistance coming down in price for service?
he didnt know jack shit about telecom, and couldnt admit it
we in the USA live inside its overcap
I think there are two arguments that lose money
1. this time is different
2. that wont happen, because the damage would be too great
we will see, my friend
/ jim |
