SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Mish's Global Economic Trend Analysis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: wwoob1 who wrote (14991)11/6/2004 10:53:36 AM
From: mishedlo  Read Replies (1) of 116555
 
From wwoob1:
Average Japanese has a lot more savings than average American, so they don't spend the expanded money supply which sits in the lousy banks to boost their reserve against RE loss.

The expanded money supply created by Greenspan is used to boost paper assets which support the Americans' consumption. So inflation is inevitable with a falling USD. It will fall even faster if the Asian banks stop buying IOUs. There is lot of poor Asians in those countries who can use the goods exported to the US. So less supply for Americans if the Chinese manufacturers look inwards.

What is wrong with this thinking?

Mish:
On the surface nothing.
Your argument assumes a few things however.
1) ever expanding US money supply
2) willingness of banks/credit companies to lend it
3) willingness of consumers to keep going deeper and deeper in debt

Have you seen money supply lately?
More or less flat for a year or so.
If money supply heads south what is going to happen?
Now the question is will it?

economagic.com
Change the timeframe to the last couple years or last 10 years or so. One recent headfake down. Is it about to explode up again?

Second point: If housing cracks, willingness to lend has only has one way to go IMO.

Third point: So far we have seen a lot of nonsense plans from Bush. Are moderate republicans going to give him everything he wants on spending? I would have thought, NO, but so far Bush seems intent to spend more recklessly than anyone in history.

Mish
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News