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To: Mark Adams who wrote (62443)	1/28/2001 6:28:33 PM
From: Oblomov	Read Replies (1) \| Respond to of 436258

If you think that real rates will decline, wouldn't TIPS or I-bonds be among the better investments in terms of return/risk ratio?

To: Mark Adams who wrote (62443)	1/28/2001 6:40:44 PM
From: Lucretius	Respond to of 436258

that will be the bull scenario, but i don't think it will work that way. it takes time to alter the global psychology into one of consumption rather than supplying our consumption. the current system revolves around supplying resources and finished goods for US paper. that whole system needs to crater and will crater once the dolalr and stock bubble have burst, then out of the ashes comes a new order, a much more stable one..... besides, Japan is on the verge of slipping back into depression (look at the nikkei if you don't believe the data coming out of there)

To: Mark Adams who wrote (62443)	1/28/2001 8:55:15 PM
From: KyrosL	Read Replies (3) \| Respond to of 436258

The US saved the world in 1998 because it was able to absorb huge export increases from Asia. Who is going to be the importer of last resort if the US goes into recession? I think that Asia is dead if the US slowdown lasts more than a couple of quarters. They never corrected the structural problems that brought about 1998. They simply exported their way out of the problems. What happens to the US economy if the savings rate jumps back to the post WWII average of 8% from the current 0%? The only way to avoid depression will be for the government to swing back to hefty deficits. I doubt that LT interest rates come down to 4% then. And what if the dollar weakens and foreigners stop financing the US trade deficit to the tune of $400 billion a year, or worse, start liquidating their hefty US investments. I don't think LT interest rates will fall under this scenario either. The energy picture is very worrisome -- it may become the basis of a seventies style stagflation. Although oil is a smaller portion of the GDP as it was in the seventies, we now also have to worry about natural gas. NG prices have risen even more than oil, unlike what happened during the oil shocks of the seventies and early 90s. NG prices affect lots of stuff from electricity and heating bills to all kinds of chemicals. It seems almost every utility is building NG fired power plants at breakneck speed, and many peaking power plants will be burning NG this summer. This summer is going to get even uglier for the US consumer, just at the time the consensus says the slowdown will be over. I am not holding my breath. Kyros