Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: reaper who wrote (5143)	8/25/2002 2:58:07 AM
From: ild	Read Replies (1) \| Respond to of 89467

I like your view, although I'm having trouble to figure out the contraction in the mortgage / refi with rates going down. RE is in self-fulfilling bubble mode. What do you think will be the catalyst to pop it? When it does pop it will continue to deflate because boomers will be selling their no longer appreciating houses in the down market.

To: reaper who wrote (5143)	8/25/2002 5:57:43 PM
From: yard_man	Read Replies (1) \| Respond to of 89467

>>Europe, IMO there are structural issues, mostly tied to latent socialism, that hurt their currency and this will only pick up pace as the global economy stalls -- i.e. expect a considerable incremental move to the political left by most of continental Europe over the next 5 years. so basically the dollar won't fall (maybe i should say 'won't collapse' as i think it will fall another 10-20% over the next couple of years) 'cause it will still be the best of a lot of crappy alternatives. << I think this analysis misses a few things: 1) Yes, Europe is in many ways more socialistic, but where are we headed and more likely to move during a protracted economic downturn. I believe we are far more likely to move toward socialist principles in a big way, than Europe is likely to move further left. Look at how big a move was made here in the 30's. Bush will be a one term president and we will get some simply horrible policies as people clamor for the economy to be "fixed." 2) Re the dollar -- the dollar is supported not simply by the historically large net positions in US denominated assets held by foreigners, but by huge flows. These flows don't have to significantly reverse for the value of the dollar relative to other currencies to take an awfully big hit -- but what is likely to happen? Will investment flows slowly choke off as flows out of this country for imported items dwindle? Sounds good ... maybe way too good ... I think it will by like the Nazdaq and that investment flows will be the first casualty not coincident with the US consumer pulling back -- it was non-linear in the making -- the huge sucking of foreign flows into the US. It became such a reinforcing thing -- when it reverses, can it really happen so smoothly. I have my doubts and so do a lot of other people. I think you'll get the lower yields you talk about and bonds will be a huge winner, but I think you may have to wait for a hiccup first or at least a period when economic activity contract and rates rise regardless of the contraction. When the 10 yr yield visits 3.8 or so, I'd sell and wait. Lotsa folks have different theories about gold and there will be lots of rationalizations when it rises. I think there will be ample evidence that most can claim they were right. You will be right about nominal returns on assets tending toward zero, perhaps. We may see some real price inflation in the things that are necessary for immediate consumption, but my approach is much simpler. I own gold and goldshares simply because I see a large loss of confidence coming in monetary authorities.