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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (100636)8/11/2009 12:01:47 AM
From: ItsAllCyclical3 Recommendations  Read Replies (1) of 116555
 
Mish I agree w/most of your work. While I may agree w/many of your overall points to play devil's advocate I submit the following:

1) Hard assets at first, other currencies later.

2) No need, not really part of the plan

3) True, but those currencies are not over owned as % of bank reserves on a world-wide basis.

4) True, but again see #3

5) They don't know anything else. Preserve the status quo. I don't think the Dollar will fall 50% i one day/weekend, but I could see it falling that much over the next 5 years.

6) What options do they have at this point but print money. They've proven again and again NOBODY is willing to make ANY hard choices.

7) You're assuming they give a rat's ass about the common man. As long as the banking system (power) is preserved who cares if they crash the real economy. They'll just buy everything up for pennies on the Dollar and reissue a new currency.

We're looking at Japan, Argentina, Zim., but maybe we should be looking at the Pound prior to the Great Depression. Although I doubt even the Pound at it's height achieved the same status as the US Peso cerca 2000 as a % of world-wilde bank reserves and % of global GDP. Is there really a precendent out there? Again I agree w/many of your main points w/respect to deflation and the velocity of money, but in the end it's really a confidence game and it comes down to marginal increase in demand/supply (think oil in late 2007, but only in reverse). A likely scenario may in fact be a harsher version of Japan's lost decade, but we could just as easily see a scenario where things spiral down, confidence is lost and we repudiate our debt (Faber). I think one has to be open to several scenarios here and constantly checking the financial weather. Keeping one mindset is a good recipe to lose one's ass over the coming years if you're wrong.

Thanks for the great blog work. Hope you continue to get more clients to suit your needs/desire.
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