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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Jim Willie CB who wrote (16245)7/7/2004 12:46:50 AM
From: Haim R. Branisteanu  Read Replies (1) of 110194
 
you have many valid points and I agree with most what you wrote .

The issue is related to the standard of living in the US and as I expect a prolonged recession in the US the consumer will start to spend much less and concentrate on essentials. - resulting in much less imports (you can not borrow for ever and never pay back)

Reforms would be forced upon the US economy lowering many unnecessary expenses and as such price of labor will drop.

As most widgets are manufactured by machines and relative little human interference - and - for example it takes about the same amount of time to assemble a big car as it takes a small car this will lower imports of various widgets and the trade deficit will move lower. (my assumtion is that the SUV days are past and small cars would be the norm)

I speculate that due to global population growth food related commodities will rise and the US is an exporter of foods even that it faces stiff competition from Brazil and the Ukraine/Romania region. This will increase exports.

As related to energy due to the recession and less expenditures the imports will be less and also technology will start giving a helping hand for alternative energy resources such as biomass, algae farms, solar, methane hydrates etc.

Aside the trading partners of the US can not afford a collapse of the UDX - therefore I assume a more measured depreciation of 10% to 20% over the next 2 to 3 years
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