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

To: T L Comiskey who wrote (8618)	10/31/2002 10:49:16 AM
From: Jim Willie CB	Read Replies (1) \| Respond to of 89467

if history repeats itself (and it usually does 90% of time)... your stocks will drop by 50% then recover to current levels in 10 years (LETTER TO A SMART COLLEGE ROOMMATE WHO BELIEVES IN STOCKS HIS LONGRUN INVESTMENT STRATEGY SO FAR? DOWN 65% FROM PEAK) I expect Dow 10,000 next to be broken in 2010 those who dont study history are bound to repeat it I dont think you have cited a single historical fact in 20 exchanges right now the greater tide is the USdollar I expect four separate 10% declines from huge and growing oversupply the last 1-2 will be accompanied by a dollar panic freefall meanwhile, Asia is ramping up on gold-centric commerce this is especially dangerous to the Western Paper Factories (printing money) the Shanghai Gold Exchange just opened last night the Indian Gold Exchange just opened last month the Islamic Dinar gold coin is scheduled for debut this spring recent threats are calling for payment for crude oil in currency convertible into gold, and the Islamic Dirhan is such a planned currency why is China a big deal? because China now owns more USTBonds than Japan!!! they own over $300B worth now, Japan under $200B now furthermore, China's trade surplus is growing at 5-7% per month with USA !!! July02 over July01 was up 80% incredibly China announced this summer their intention to balance their surpluses they will store in reserves of 1/3 USTBond, 1/3 EuroBond, 1/3 GOLD thus the Shanghai Gold Exchange some might still not comprehend the implications of these moves it is a mega-trend shift, a paradigm shift, away from US$ toward GOLD this will undermine future efforts to continue to support US federal debt that debt is now $6000B and rising again regardless of whose fault it is, this debt is rising one can argue about the politics, or instead determine the paths and react our financial futures are at stake here so China surpluses and Arab Oil surpluses will go less to US$, more to GOLD with the lesser support of USTBonds will come higher interest rates in USA that is the dire implication, higher US rates this will undermine US stock prices for years to come next year funding of pensions will undermine earnings I expect pension underfunded to sap earnings for 2-4 more years just as in the 1990 decade, one thing after another turned positive... in this 2000 decade, one thing after another is turning negative it is all about the USdollar, which must come down 30-35% but unfortunately, a lower US$ will do little to reverse our trade deficit from 1980 to 2000 we have discharged our mfg base to Asia we have become an assembly mfg nation, with 51st NAFTA state Mexico so the mechanism for seeing reduced trade gaps as US$ drops are absent why? because even what we do mfr in USA has 50% Asian components in our biggest export sector (computers) most components are Asian this is the basis for some analysts to expect a dollar crisis soon the US$ will decline from eroding fundamentals, and keep falling because there will be almost zero change to those fundys as currency ratios balance e.g. from January to August, the US$ fell by 10%, but trade gap widened by 5% some would argue that recent months have improved .... wrong the last two months of trade data show the largest trade gaps our debts are smothering the entire economy, in every single corner soon real estate will experience a sudden 15% decline in a single quarter then RE will spring a slow leak for 5 consecutive years as rates rise this is the nature of the vicious cycle led by a dollar decline take it easy, be careful, read some history / jim