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

To: Cogito Ergo Sum who wrote (39643)	10/15/2003 10:18:27 PM
From: elmatador	Read Replies (2) \| Respond to of 74559

Don't expect this wealth to be transferred internally. It will be a transfer to somewhere else. Some signs of how wealth will be transferred externally: I don't know how old you guys are. I'll be 51 next December. Based on what I have seen in the last 40 I don't expect the pattern of wealth transfer changing much. That because the people living in those next 50 years are not different than the ones that lived in the last 50, nor in the previous, i.e., first half of 20th Century. The wealth will be transferred in the next 50 years, will be in the form of wealth spreading more evenly. My point is that globalization has allowed to the poor masses to have a say in put pressure on their rulers. Governing elites are hearing that. Or why do you think China changed since 1978? It changed because the governing elite knew if left as it were China would have balkanized with a big mayhem. Those guys wouldn't be reading the Mao's Red Book and marching wearing the same outfit. No sir! Now look what is happening in Bolivia. Look what happened in Venezuela. That started 10 years ago with the Chiapas Mexicans. And this will spread up faster from now on. Look what happens outside the premises of every political jamboree put up by the IMF or the World Bank to see what I mean. The lost decade, the debt crisis, was the last one. There won't be another like that. See how the Asian crisis was "solved" in about 3 and half years. See how a default of mega proportions such as Argentina's, is absorbed by the market without missing a bit. Ok, where I was? Oh, yes, wealth transfer. As those governing elites start feeling insecure they have to do something about it. See India without much fanfare getting in line to open up and trying to be part of the world economy. Yes, you can tell, that those 'hot spots' Africa and Middle East will keep where they are for some time. But that will also change when they start seeing other making progress and their best people voting with their feet and immigrating. For those troubled places it will take a while more. But for the major players, it is going to be a different story. They slowly metamorphose into something else. As those countries get on board of the world economy, which was monopolized by about 50 years by a group of countries selected in Breton Woods, wealth starts to be spread more even. What we are witnessing, right now, is the push-pull effect. The ones holding the wealth don't let it go without a fight. The governing elites of those who don't hold wealth still try -in vain- to keep the status quo. Still rooted in a system that for all practical purposes has lost its meaning. As Brazil and Argentina are the best examples. But they will get there. Pressure is up and will keep up and up. I tried hard to be civilized Jay, you've got to give me the credit for that "-)

To: Cogito Ergo Sum who wrote (39643)	10/15/2003 10:55:31 PM
From: TobagoJack	Read Replies (3) \| Respond to of 74559

Hello KastelCo, ACF Mike is counting on money that is spoken for Message 19405754 or otherwise is dissipating, evaporating or about to be seized, redistributed and then pulverized. The micro embedded value within home equity does not count in this macro demographic wealth game, where only truly productive (factories, mines, etc) assets matter. Japan will be an early test case, and I doubt over-valued Japanese homes will find 'suitable' buyers when all the boomers try to sell, after packing off their parents. The problem with bubbles engendered by irresponsible liquidity is that after the blowup of one, the liquidity, not much destroyed, goes to fuel the next one, and repeats the damage, and so forth, until the liquidity is blown up in a physical sense, or evaporated by all the monetary blowups. As the Greensputin/BurnAndKaput FED is intent on struggling against the quicksand of liquidity with still more liquidity, working in concert with logically absurd fiscal behavior in trying to dig out from other quagmires, we must therefore conclude that the whole messy episode will end with a physical bam! or monetary collapse leading to crowds on the streets. The movie will not likely end with babyboomers leaving their mom's funeral, sell the old homestead to other babyboomers leaving their dad's wake, and go sailing in the Caribbean. In the macro accounting balance sheet, take out the home equity, what is then left? an unfathomably large social security IOU, and a mindset altering public debt piled against private obligations? Let's watch the movie ("Monetary Debasement - Part XIV") and continue to guess at the ending, but do not forget to buy some gold at the concessionary prices when taking a toilet break, because special effects in the movie will not likely save the day, and the movie may end the way Parts I to XIII did, badly. Chugs, Jay

To: Cogito Ergo Sum who wrote (39643)	10/16/2003 12:30:37 AM
From: AC Flyer	Read Replies (1) \| Respond to of 74559

Hi KC: >>1) I think the wealth transfer won't be as rapid or of such magnitude as you predict.<< Point taken. The research paper that I cited estimates $41 trillion over 50 years, down from estimates of $100+ trillion pre-dot com meltdown. Projections over a 50 year time period can only be the roughest of estimates, but nevertheless, the key point is still valid - the US economy is operating with household balance sheets that are very deep, with unprecedentedly liquid financial markets, and a lot of money is going to change hands through inheritance. >>I also don't think everyone is 'retiring' when they hit that magic age.<< Bingo! This is why the so-called "Social Security Crisis" is entirely a work of political fiction, authored by those, primarily Democrats, who have something to gain by selling this fictional idea to the gullible electorate. "Retirement" did not exist in reality or as a concept until the 1930s, when it was invented by FDR as a means to get the old folks out of the workforce. What's so great about ceasing to be a productive member of society, anyway? We should push the concept of retirement back where it belongs, in the laps of the European Socialists who believe that Government should pay for everything for everybody, all the time. >>It's possible your bubble has a shot but I'm not sold.<< This is progress. Believe it. Congress and the Fed are feeding fiscal and monetary rocket fuel to the stock market. Inflationary pressures are totally absent, meaning low interest rates continue to the horizon. US final domestic demand is very strong (those Boomers again) and rising towards an inevitable late-decade crescendo. The manufacturing economy is turning (Minus 2MM souls. Oh well, that's capitalism for you). Telcomm and high tech are turning. The Valley is cooking up a whole new generation of must-have technologies. Google will be the most spectacular IPO in living memory (that's 12 to 24 months or so in the US). The Boomers are desperate for one more big stock market score. The third leg of the Great Bull will eclipse the first two. It's 1923, not 1933. >>BTW your vision of the future post your bubble is likely the bleakest on the board :o)<< Possibly. I am assigning a non-trivial probability to a full-blown Depression with enormous debt liquidation and economic hardship. You Canadians will be eating wood pulp. The wild cards in the US are immigration and China. Immigration because it may partly fill the yawning chasm in final domestic demand that will appear from 2009 through 2023, China because it may become the global economic growth engine that drags the West through this incredibly challenging period.