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

To: Seeker of Truth who wrote (41175)	11/9/2003 4:43:56 PM
From: Condor	Read Replies (1) \| Respond to of 74559

Hello Malcolm, I understand you have a history of association with China and given your age and experience, I would be most interested in your observations about the future of this culture, it's economy and it's place in the world. If you're game to tackle a wide ranging, rambling look at China let's title it "China: Here's what I think!" I don't intend for this to be a project above and beyond anything you're prepared to do. A fun collage of rambling thoughts, visions and forecasts would be perfect. You may choose to pass and thats OK too. You have one of the most intriguing profiles I have ever read on SI. Beware! One day I will ask you post your life story. :o) Regards Condor@tellmeabedtimestoryplease.com

To: Seeker of Truth who wrote (41175)	11/9/2003 5:53:16 PM
From: Mark Adams	Read Replies (1) \| Respond to of 74559

I don't know about hedge costs. Nor do I. Knowing such (ie a graph over time) might give us an idea on what the collective marketplace thinks about how things are going, but the picture is liable to be so complex we are unable to interpret. Most people are saving yen like mad, into the post office mainly. And people would have the US do the same thing. Individually, it probably is a good course, but on a macro view, it appears like suicide, at least considering the '200x' history to date. A lesson from Japan is that the call for higher savings/less debt is the call for lower nominal returns and perhaps mild deflation. The time to save is during periods of growth, not in the midst of a global slowdown. Reminds me of that '7 years of plenty, 7 years of famine' story. And the saying 'Make hay while the sun shines'. For the Grasshopper to start working in the midst of winter, well... One aspect of this 'saving yen like mad in the midst of deflation and bloating government debt' is the supply/demand story. If savers are saving, then the postal system has to grow liabilities. Increased savings in one place must lead to increased debt, or capital, somewhere else. It appears to me if savers are willing to save in local currency at .5% with a 1% deflation rate, then international money managers arbitrage a bit of income, hedging the exchange rate risk, lowering the cost of capital elsewhere, well, we have things working as they should. Those best able to absorb risk are taking it on. And the 'savings' take an indirect route from something perceived safe with a low return to hopefully a better use of capital, with higher risk/return. Like most of these things it's hard to predict the date of the inflationary explosion If savings are deflationary by nature of being 'postponed consumption', then an inflationary explosion will take place when those savings are converted to consumption. Unless the market place correctly anticipates the nature of that future consumption and creates the productive resources to meet the demand. The story for the Japanese is complicated by the fact they are a 'bit player' in the global scene. No intention here to denigrate; it is to their advantage they are such. When they choose to disgorge their savings, the inflationary impact of this may be offset by China's savings, or India's savings. The US and Europe are in much the same boat. The world is complex, requiring we look at the global picture even though much of our lives are submerged in a much smaller 'national/tribal' pond. At least until InterPlanetary trade becomes the norm...