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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: surfbaron who wrote (4692)	8/16/2002 4:46:23 PM
From: Jim Willie CB	Read Replies (2) \| Respond to of 89467

and Clinton raided SocSec Trust Fund, ergo NO SURPLUS / jw

To: surfbaron who wrote (4692)	8/16/2002 4:50:12 PM
From: Jim Willie CB	Read Replies (2) \| Respond to of 89467

(another thought) when rates rise, US interest cost explodes the USGovt has done the same thing as corporations they have swapped from longterm debt to shorterm debt (fully described by Pimco's Bill Gross -- very handsome man) the Clinton maneuver directly addresses the mindset of a drug addict seeking shorterm results, immediate gratification not just with debt management, but the strong dollar policy Clinton probably was being serviced under the table when he made this short-sighted decision Clinton probably figured that when the debt cost rose, when the strong dollar reverses, his successor would be blamed by all the economic-illiterate politically-motivated numbnuts, of which there are legions when rates rise, and they will inevitably, our cost to service the $6000 billion in debt will rise dramatically even as it will for US corporations my personal expectation is that the upcoming turning point which delivers rising interest rates will be from actions taken by foreign holders of US assets not just stocks, but USTBonds as well Sinclair believes that happens, starting in November we will see outtahere, good weekend to all / jim

To: surfbaron who wrote (4692)	8/16/2002 4:58:47 PM
From: Jim Willie CB	Respond to of 89467

14 Reasons Why Capital Markets Will Deteriorate Into Depression Attention Business Editors: Canada's resident economic and stock market bear sees first signs of Depression on horizon. Stephen Gadsden, author, columnist and researcher, sees a major economic downturn in 2003, leading unsuspecting Canadians into the greatest economic depression since 1932. TORONTO, Aug. 13 /CNW/ - After five years of economic and market research, Stephen Gadsden, co-author of the landmark book KRASH! (July 1999), now believes that Canada is headed into one of the worst economic depressions since the fall of stock markets in 1929 - 1932. Mr. Gadsden's prediction is in stark contrast to the position of Bank of Canada governor David Dodge who continues to cite Canada's positive economic growth and GDP. Mr. Gadsden states that there are at least 12 reasons why economic depression is a very real threat in 2003, including entrenched corporate malfeasance and unprecedented consumer and corporate debt in the USA. As the world's economic growth engine, the US is besieged by failing capital markets and a sputtering economy. If the US economy continues to deteriorate through the end of the third quarter of 2002, economic depression is inevitable and the world, including Canada, will quickly follow suit. [Web note: Stephen sent Financial Sense the above release and because I was curious about "at least 12 reasons," I asked him to share his views.] The reason for my news release was to counter recent media debates in Canada and the US about whether the stock market was in any way predicative of future economic activity. Frankly, I was incredulous. What a waste of ink. So, I reminded people that our capital markets operate on a simple premise: stock markets represent common ground where people with money they want to put to work meet, observe and invest in companies that are shopping for capital needed to expand and grow their businesses. Where there is a dearth of investment capital or companies seeking capital to expand, the entire capital market will cease to function efficiently. As a corollary to this, stock markets are integrally intertwined with the economy and are the leading indicator of future economic health. This being so, and I don't know why there is a debate at all, a breakdown in capital markets because of low capital spending or disillusioned investors means poor economic growth. Why we could enter a Depression-- It has been 2.5 years since North American equity markets began to deteriorate. By the end of the third quarter we should have a good idea as to how capital markets will perform until at least March 2003. If corporate profits and trading volumes continue to stagnate, it will likely signal the beginning of a long period of economic inactivity in the form of a deflationary spiral. Here are 14 reasons why I believe capital markets will deteriorate further and lead to a Depression: 1. stock markets with still rich valuations 2. deteriorating corporate earnings 3. rising interest rates (Bank of Canada)...the US will have to raise rates to continue to attract foreign capital to enable it to fund its debt 4. inflation will increase as a result of a the triple rise in crude oil prices since its $10.00 low (stagflation) 5. tightening bank credit (due to non-performing loans and a real estate asset bubble) 6. acknowledged increase in consumer saving (albeit a tepid one) 7. increasing income tax (all bets for tax reform are off in Canada, and Bush will have to raise tax in order to help reduce an historically high national deficit) 8. the US dollar continues to show unbridled strength which will continue to pound down domestic manufacturing and production 9. a burgeoning trade deficit which has "dollarized" the world and leaves the US particularly vulnerable to manipulation by foreign cabals and governments (China is the largest accumulator of US dollars and could bring the US to its knees if China decided to sell its US holdings) 10. political turmoil due to failing economic infrastructure 11. corporate malfeasance and loss of investor confidence 12. massive consumer and corporate debt 13. the prospect of war in the Middle East, Asia and South China Sea 14. the steady conversion of dollars to precious metals © 2002 Stephen Gadsden, BA, MA, CFP financialsense.com