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

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To: koan who wrote (93578)	1/31/2009 4:33:29 PM
From: John McCarthy	3 Recommendations Read Replies (1) of 116555

Last man standing thesis: Hi Koan Just to get there i.e. you know I'm stupid ... and so, I am very comfortable throwing the following nonsense your way. your line: Boy gold and silver are continuously moving up with the dollar. Has been buggin me and buggin me and so on. And so the question becomes how can gold and the dollar BOTH keep poppin northward (to this end there is a guy out there in google news talking $3,000 gold) Here it goes: (a) There are 3 ISLANDS. (1) Europe (2) Asia (3) USA (1) Europe (1) Europe has been hit by an asteriod. Didn't kill the people or buildings - but all coin currency and debt currency (I owe use's) have been eviserated. (1A) At some point in Europe the only way to purchase something is with USA currency. (1B) The island of Europe will grow communistic type political thingies because thats how you counter-balance asteriods. Spain and Greece first. In the UK it will be called something different. (1C) The island of Europe will split in two: One part will be called the FRANCO LAND and the other part GERMANIC LAND. The reason for this is because France and Germany caught less of the asteriod. (1D) The upshoot of all this crap is that on a COMPARATIVE basis the Euro is eviserated and the USA dollar gets hoarded (1E) Euro people ALREADY holding dollars hedge a decline in their asset purchasing power and buy GOLD. -- Dollar Up -- Gold Up (2) Asia (2A) Asia missed the asteriod. HAS an equally big problem. Asia has a DEMAND problem. -- Euro Island can't buy. No currency. -- USA Island have become savers ++10% -- Asia Island has no Infra-Asian-Buyers (of SIZE) IOW, there is no Infra-Asian-Mojo demand thingie between Asian Island players. Their current Capacity to build widgets EXCEEDS -- TOTAL EARTH DEMAND. Moreover, this Capacity actually increases -- on a % basis of TOTAL EARTH DEMAND - as TOTAL EARTH DEMAND trends downward over '09 '10 '11 -- They have a piggy bank - foreign reserves - but the TREND of its growth swings negative due to DEMAND issue. Which leads to foreign investments running from their island. -- Their piggy bank is POTENTIALLY their biggest weakness. (2B) Asia Island --use to-- buy USA Island debt. Lots of it. -- A new force in USA land (they call him "the G-MAN") is NOT concerned with 'whose gonna buy all this debt' -- G-MAN knows compartive literature and more importantly COMPARATIVE currency. ----- Euro currency has evisterated. So not a challenge to USA island currency. ----- G-MAN prepared to either (1) sell more USA debt to Asia Island --or-- just say "f-it" and print money. Either way - Asia land has a dilemma. Their negative GDP %'s (NO DEMAND FOR THEIR GOODS) shake the fabrics of their cultures. If G-MAN does "f-it" and prints money -- intuitively it should trash USA Island dollars. Counter-intuitively it does not. Contemporaneous (no such word) - with USA printing presses - Asia Island currencies get trashed as the value of Asia Island widget CAPACITY gets marked to market. (2C) Asia Island people hoard USA dollars (their currency trashed) and attempt to hoard gold. -- Dollar Up -- Gold Up (3) USA Until Europe gets off the mat and Asia develops INFRA-ASIA-MOJO demand - because of "COMPARATIVES" (like "ATOMICS" in the movie DUNE) the dollar is DEMAND evaluated and not USA junk debt evaluated. G-MAN is last man standing. -- Dollar Up -- Gold Up Koan - this ain't all my fault. I take responsibility for being a sicko dumbass. But if you would just stop noticing stuff it would help - my disease. On a different note - I is noticing the gold/silver juniors waking up. If they do - I assume you and onepath will go straight for the warrants. I wll be lurking. Thanks for the exerosism. (or however you spell it) regards John

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