Tippet;
in the very near future many other things will matter.
1) The US's fantastic trade imbalance.
2) The multiplier effect of reduced demand abroad
3) The disappearance of a large chunk of equity
4) Excess capacity in the industries most highly leveraged
5) A reversal of the credit boom that has fueled the rise in asset prices
These arguments are overly simple and the same sort of one liners
the news pundits use to state their positions, any one who wants
to can shoot hole through them. You need the real underlying
principles.
--------------------
1 trade imbalance don't mean a thing, if I'm buying chips from
you and your not making any profit on the chips, but I'm selling
you main frames and I'm making a profit. Not only that I own more
of your debt than you own of mine, and I collect more interest than
I pay out.
2 Reduced demand for what ? The demand is there, many of the Gov
know that and thrive off import tariffs, in spite of the Dollars
recent decline in the markets, it's in huge demand on the streets
more than any other aspect it's the safety in the dollar that
over rides this argument, that's tied to which BIG Political system
is considered the most stable.
I could go on but this is fruitless and goes no where.
We are in a Global economy that no one can describe it in one liners
or with less than a book.
It's about all I can do to keep up with interest rates and the
price of oil, ( high oil chokes the worlds economy ) in a nut
shell it's the biggest factor, as it's what every one must have.
The recent spike in oil prices comes at a bad time, not just for
us but for the world.
Next to the value of the Dollar it's always the talk on the
street in most 3rd world countries I'v been to. While many of
them are critical of us, the third thing that comes up among
most of them is "how can I get a green card " or become a
a citizen of the U.S.
Jim |
