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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: LLCF who wrote (3124)	7/23/2003 8:46:48 AM
From: Box-By-The-Riviera™	Respond to of 4904

agreed. and the WHAT is probably what we already own is my guess <g>

To: LLCF who wrote (3124)	7/23/2003 10:52:11 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 4904

It's not 'year after year'... it has exploded recently actually, it is "year after year". look at a chart of the US C/A deficit. endless deficits extending back as far as the eye can see, with a lone surplus during the early 90s recession. back in the mid 80s, people said it was "unsustainable". but instead it's gotten worse and worse. Why would any country continue to snarf up worthless, declining paper at the same rate? why? because they are the drug pusher and we are the addict. if we keel over (if the dollar tanks), they are SOL. why would they be SOL? because their economies--their economic infrastructures--have capacity greatly exceeding domestic demand, so by definition they must EXPORT OR DIE. that is why they buy all our confetti, not because they think it is a good investment. rather, if they don't buy our confetti, they know we can't buy all their crap. they have no choice if they want "export-led growth". the important thing to understand is that they are not making an investment decision by buying our garbage; they are making a policy decision. that is, their trade and economic policy. the investment decision is required once the policy is set, regardless of the merits (or, in the case of the USTs, lack thereof). these kind of imbalances would have been impossible under a gold standard, because the US would long ago have run out of reserves (we only have $80-90 billion of gold reserves, but our YEARLY C/A deficit is now $500 billion, so our gold reserves wouldn't even cover three months of the C/A deficit.) however, under today's fiat regime, these egregious imbalances become possible, as long as you have lunatics running the Fed and lunatics overseas who believe their whole economies should be export-based. at some point we will expect this to collapse in a global debt depression and gold can hopefully be reestablished as the only legitimate money.