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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: bond_bubble who wrote (48212)	12/27/2005 9:11:22 AM
From: Ramsey Su	Read Replies (1) of 110194

bond bubble, you made a lot of good points in your recent series of posts. I would like to jump in and offer a different approach to your analysis. Today's economic principles are primarily developed in the western world, during an era that the world is quite different from today. I opine that it is becoming more and more insufficient in explaining and addressing the issues of the modern world. For example, when Greenfed lowered rates to accommodate, that was a textbook perfect strategy from the old school, intended to stimulate the economy via cap ex and employment. Under the era of globalization, the cap ex found its way to the low cost producers of the world such as Chi-diah and hastened the hollowing out of US manufacturing in the process. Many years from now, there will be a Nobel Prize going to an economist who explained these changes and came up with a globalization economics model. Another problem facing the old western economic principles is the outdated indicators. Look at one of the most watched indicators, the CPI. It is no longer just a supply demand driven number of just the US or just one country. Shouldn't we be looking at how efficiently everything ranging from a few lines of software to some cotton socks may be routed to the lowest cost source in the world? The objective of all domestic fiscal and monetary policies is clear. We need to figure out how to maintain, if not improve on our standard of living as everyone else in the world are trying to do same. Lou Dobbs is probably the best example of a head-in-sand thinker, somehow believing that just because you are born in the USA gives you the right to higher rewards for the same amount of work. So far, I see no leadership in the fiscal nor monetary side that can keep us on top. I see us as a bunch of aphids, kept fat dumb and happy by all the ants of the world so they can suck up all the excesses from us.

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