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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Mark Adams who wrote (1901)	11/6/2003 8:51:22 PM
From: Wade	Read Replies (1) \| Respond to of 110194

Hi Mark, Now, I remembered seeing you at Austin, TX. Am I right? Thanks for both of your reference articles. I enjoyed reading them. As you pointed out that "...the statement leads one to suggest that the problem isn't the amount of debt, it is who holds it, as debtor and creditor." The bottom line is we are the debtor, regardless how the creditors use that profit/credit. Just as you do not know how your bank buy and sell your house mortgage to other banks. If you fail to pay the bank you will lose your house because your bank is the creditor. Let me use some thing I learned: if you owe 100K to the bank. You got a problem. However, if you owe the bank 100 million. Your bank has a problem. Now, it is apparent that we owe too much to other nations. They are forced to finance our economy. Luckily, we have the option to print more money to pay for the debt without working. They only see that their hard earned credits evaporate before their eyes. Do you think they feel that we are are a good debtor? Will they lend us more money in the future? When our credit gets worse, the higher the interest rate we will have to pay in order to borrow money. The bottom line is if we are able to pay for the debt in the foreseeable future. I see these two lines are about to intersect. At that point, no more credit. This is what we are worried about. Sincerely, Wade

To: Mark Adams who wrote (1901)	11/11/2003 12:23:01 AM
From: Mark Adams	Read Replies (2) \| Respond to of 110194

hussmanfunds.com A significant portion of what we “import” from foreign countries actually represents intermediate goods produced by foreign subsidiaries of U.S. companies, or companies formed by direct U.S. investment into those countries. Think about this for a second. We import the same intermediate goods we would have manufactured at home, but at cheaper prices (meaning that the deduction to GDP on account of imports will generally be proportionately smaller than the corresponding loss in U.S. employment). Yet when we turn around to calculate productivity, we don't count the foreign jobs used to produce that output. As Fabrizio Galimberti has noted in the Economist, foreign outsourcing has the effect of artificially raising productivity figures because subtracting imports from GDP does not adequately correct for their impact on final output, yet foreign labor is not counted, so measured output per worker increases. The net effect of all this is that the U.S. “productivity miracle” is almost entirely dependent on growth in U.S. imports and foreign labor outsourcing. addresses an aspect I hadn't considered when issuing the query: How much of what China builds ships to the US is coming from companies that are partially or totally owned subsids of American entities? If a Nike factory in China makes shoes sold in NYC for $150/pair, how do you parse the money spent on Chinese factories and labors, and who ultimately benefits? Happy days.