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.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (27285)	1/10/2003 11:14:17 PM
From: AC Flyer	Read Replies (2) \| Respond to of 74559

>>Look to China right now. It is the only game in town and every dick and Harry -and their uncles- are looking for it for salvation. Without places like China to propel world's economy it is down all the way from here.<< Yes, China has a major role to play, but with one quarter of the Chinese population, the US economy is SIX TIMES the size of China's. As a driver of global growth, China is a sideshow. And as an investment destination, China is a joke. The so-called Chinese stock market is - for now - purely a CCP political instrument. >>Consumers propelling the US and Euro economies forever?<< The "forever" part is your contribution. As is the "Euro" part. The US is virtually unique in the developed world in that its population is growing, due to the highest birth rates in the West (2.1+ children per couple) and to immigration. All the Western European countries have birth rates that are sub-replacement level and minimal immigration - hence shrinking populations. Italy is the poster child, so to speak, for this trend with a birth rate per couple of about ~1 and is rapidly disappearing up its own Mediterranean bunghole. What does this mean? Take a look at Japan, whose economic problems are largely demographic-driven and you'll see Italy's future. The Japanese post-war generation worked its collective butt off but failed to apply the same commitment to reproduction. Japan doesn't come out of the tank until about 2008/2009, when the US goes in it (maybe), for reasons of demographics So much for the macro view. In the short term, the reason that the US economy has been able to swallow whole the biggest financial bubble in the history of the world, belch politely and keep on truckin' is - repeat after me - boomer demographics! Don't take my word for it - do a little Googling and you will see that the boomer generation is the biggest demographic spike in history. Now, what is an economy, other than the integral of the economic behavior of all the individuals in it? Take a huge demographic spike made up of individuals approaching, on average, their peak spending years (late 40s - college expense for kids, second homes, mid-life crisis toys, etc.) and what do you get? You get a depression-proof economic system. >>Well, only if you think if they would be offered a third mortgage on their homes!<< Would you be surprised to know that more than one third of homes (owner-occupied residential units in gov-speak) in the US carry no mortgages of any kind? That half of the rest carry mortgages averaging $40,000? That only 1.4% of US homes carry mortgages of more than $300,000? That the median mortgage is for 56% of the value of the home? The reality is very different to the doomster headlines. The US consumer has one helluva balance sheet. census.gov