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

To: Rarebird who wrote (7349)	2/8/2004 2:05:40 PM
From: mishedlo	Respond to of 110194

The entire US economy was sustained on a full GDP basis by borrowing about 25% of the entire GDP. Sure do Do you know that this is the first thing that the US has to STOP doing, and to stop it, the US will have to shut down their internal credit taps which will take higher US interest rates, both numerical and REAL? Well perhaps we should perhaps we shouldn't. In either case it does not matter. Rates are not headed higher, and even IF they did, jobs are not coming back to the US. We simply need to spend less and lower our standard of living. It will happen but raising interest rates may or may not be a part of it. They will not be a part of it in the short term IMO. Quite simply it is IMPOSSIBLE for the US to balance trade by interest rate hiking alone, given salary differences between the US and China and India. Can't be done. Period. Do you know that the US will have to bring its budget deficits under control and there is no way to do this other than a combination of higher taxes and lower spending? Of course. Tell me when? Not with the budget Bush just proposed. Finally, do you know that the Bush Administration is NOT prepared to do these things. To do them would mean that the much postponed real US economic recession could no longer be either disguised or delayed. Agree completely It would also require a full military pull out of Iraq and a vast scaling down of US worldwide military bases and other deployments. We should do that but wont ================================================ So where does that leave us. Right where we are and right on the same path. Lower interest rates and more spending Mish

To: Rarebird who wrote (7349)	2/8/2004 4:23:33 PM
From: NOW	Respond to of 110194

"and Japan's export industries will mostly die."Hasnt happened so far despite a massive rise in Yen.

To: Rarebird who wrote (7349)	2/10/2004 7:26:44 PM
From: Helios	Respond to of 110194

Hey Rairbird, Still predicting disasters I see. Couple of years ago the pending disaster du jour was China devaluing their currency, wasn't it? Now it's the opposite, but of course to similar dire consequence. This time however even I think you may be right. However if we can hold off the falling "debt tree" until the election (when Bush seals the deal) I am guessing sounder fiscal policy will take hold and after three or four years of truly puritan austerity things will settle down. BTW I guess you've been making big bucks on gold and congrads on that. Funny thing 2003 was my best year ever (90%) but I got lucky and caught a few hot tech stocks. Cheers!