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

To: LLCF who wrote (3128)	7/23/2003 1:36:14 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 4916

You forgot the rest of my post... exploded and gone parabolic recently not exactly...i mean, people said it had exploded and gone parabolic back in the mid 80s. this led the G7 to make coordinated efforts to bring down the dollar value, which they did, but the "unsustainable" C/A deficit actually grew for a couple more years after that. notice that over the past year the dollar has again fallen sharply after making a double top, but the C/A deficit keeps growing. this is rather similar to the 80s and if history continues to rhyme, we could have a couple more years of C/A deficit growth even more extreme than what we've seen so far. and now we have another unsustainable deficit which is three times larger than the "inconceivable" peak C/A deficit of the 80s. but since it's all confetti, what's to say the $500 billion deficit won't become $700 or $800 billion before it's all over. maybe even a trillion, kind of like John Chambers' prediction of CSCO's market cap right before CSCO fell almost 90% -g-. i agree with you that there has been an obvious acceleration these past couple years. i just don't see what will stop it. perversely, our C/A deficit forces our partners to park huge amounts of capital here, which helps keep rates low and makes funds available to consumers to buy more junk and overpriced houses. thus our economy remains in a phase of nominal "growth", even as our manufacturing base is gutted. this gives Greenspan some cover and makes the politicians happy. on the other hand, the Chinese and Japanese have a huge market for all their junk, so they are happy as well. of course it's an abomination of nature, but in the meantime, what's not to like -g-.