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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: tradermike_1999 who started this subject6/6/2004 5:00:43 AM
From: Seeker of Truth  Read Replies (5) of 74559
 
I'd like to advance the possibility that the unwinding will take place very gradually, with ultimate impoverishment of those who stick to the US dollar and/or US stocks. The negative factors are quite clear: 1. US strongly opposes the Palestinians, angering all Moslems. 2. US won't relinquish its semi-control over Iraq. 3. U.S. consumers are maxed out. 4. Huge government deficits are a given. 5. Balance of payments is unprecedented in history.
However there is, I notice, one positive factor. I don't see how it can outweigh the negative factors but it may slow the unwinding process. That is the advance of technology.
I and many of us are deeply indebted to Jay Chen for explaining that the technology area is almost the least profitable area one can find in which to invest. The very rapid advance obsoletes everyone's product. Huge expenses in R&D become an absolute necessity. The profits are minimal for the generators of new technology. However there is a great advantage to the CONSUMERS OF TECHNOLOGy. Particularly is this noticeable in the cheapening of communication. Nowadays a person in business is spending a huge chunk of the day's time on the phone, often via conference calls. This saves the energy money and time involved in everybody getting from their site to the meeting place. It also brings people into more frequent contact than was the case formerly, helping to coordinate their efforts.
Of course face to face contact and the accompanying expense of air travel and hotels are still necessary to a degree, but these are mostly concerned with the sales process, particularly the early contacts. Intracompany communication is greatly improved by the trend. A widespread benefit of the increased communication is the increased usefulness of outsourcers. Indeed I increasingly encounter outsourcers who themselves outsource many parts of their job to smaller specialists. Thus we have hierarchies of specialists now available. The tasks can thus be done by the most competent.
Communication facilitates specialization. This tends to make enterprises more profitable.
If the decisions are made in an autocratic way, no amount of extra info and varied points of view will help. But if companies are seeking optimal decisions in a reasonable way, the confluence of varied points of view will be very helpful in making good decisions.

Of course the White House representatives of the superrich turn out to be superstupid and this and the other national negatives are dominant, producing a downfall which may be precipitous. My point here is that it may be gradual.
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