Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: elmatador who wrote (76557)	3/20/2008 3:00:59 PM
From: THE ANT	of 116555

Elmat,I saw a chart about 10-15 years ago,I think in Barrons,that showed the corelation in the world when it comes to recessions,and from 1900 on there is strong corelation.I would rather go on data and the past and not accept that this time it will be different.Even our current mess, although different from recessions of the last 50 years,is similar to what happened in 1930.I am not convinced about decoupling.I was hoping the the rest of the world would hold us up and that we would not pull them down.As we are going down I think the world will slow also.China is the 51st US state(at least until now they have pretended to be)and will likely take the brunt of our slow down unless they choose to quickly become a consumer society(the US did after WWII and China could make the change if the want-they run their economy now as though at war and have done a great job).The Brasilian economy owes a good deal of its improvment to changes they have made but also a good deal to the world situation.Rising commodity production and slowing world demand will slow the BRasilian economy.Brasilian interest rates are at artificial levels based on world inflation( in a ways they like China are on a war time setting)While times are good they sell more and consume less-good for the economy and short term pain for the population.When Brasilian interest rates go down the currency falls.EWZ has three head winds 1-a PE of 13 for a commodity economy is not that low 2- The Real is going down 3-Commodities are going down.There are beter places even in Brasil for my money,for now at least.We shall soon have our answer.In Brasil any slowing may not even be noticed by the populace as they will be comming off a war time setting.Low interest rates will keep the trem da alegria moving along.

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