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

To: TobagoJack who wrote (33919)	5/19/2003 3:22:27 AM
From: elmatador	Respond to of 74559

Workers in US/Europe/Japan priced themselves outside the market, perhaps, forever. Deflation may not make economic to produce, in the US/Europe/Japan, what was sent to be produced elsewhere. Workers in Europe priced themselves outside the market, perhaps, forever. China has ahead of it a decade of competitiveness in labor costs vis a vis US/Europe/Japan. It is hard to believe US/Europe/Japan has anything (politically accepted by the masses)in their arsenal as a countervailing power. For the last 15 years the writing was on the wall. But there hasn't been any action in US/Europe/Japan to adjust their economies to the new economic realities. It became like a tooth which treatment was not available in time and in the end had to be extracted. The only way out would be PAINFULL DEEP CUTS in the governments' machines. But we know this is not going to happen. So its down and down... "The easiest assets to be deflated are stocks. The hardest are salaries. Since salaries are the hardest to deflate, they just sack the employees. It is all happening right in front of our eyes. But thinking again: governments can't be deflated. Had been a possibility for the government machine to be deflated, you wouldn't have a 300 billion budget for "defense" (in fact is 400billion) now that the Cold War ended. Even though they can't support themselves anymore -due to the disappearing tax payers that fund them- they keep printing money or borrowing to keep their machine from being deflated. And that's the main cause of the world economy is going down and down. Message 18210549