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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: glenn_a who wrote (8694)	7/5/2004 12:02:26 PM
From: TH	Read Replies (1) \| Respond to of 116555

glenn a, Fantastic. You simply amaze me, and often. Care to elaborate on this statement, "I think the answer lies in the creation of an entire new incentive system outside the existing monetary regime."? I struggle with the accuracy of my perception of the situation daily, and I've essentially given up any attempt to convert those (the majority) that believe our system is not "broke". I think 99% of Americans think nothing is wrong, so maybe I'm wrong. "1 – I became convinced that the disparity between “reality” and “unreality” in the global economy was much less that I currently anticipate. This would mean the path to equilibrium could be much less painful." Again, outstanding analysis and summation. Thx TH

To: glenn_a who wrote (8694)	7/6/2004 9:56:59 AM
From: rubed	Respond to of 116555

Great work, Glenn, I am enjoying your thinking... damn you are smarter than me but that is another issue. As I have been thinking about the K-wave winter that we are all expecting along with the impact of Greenie's easy money to counteract it, I came to this simple analysis that I will throw out there. Traditional K-wave winter = Stocks down, bonds up in deflationary enviroment However, in this case we have the impact of China and India's industrialization which is putting pressure on commodity prices, spurred on by the American consumer. I believe that China and India will continue to grow (though at reduced paces of course) even if there are a series of US consumer led recessions. Thus I hypothesize in this K-wave winter, it will be different and we will have. 2000s K-wave winter = Stocks down, bonds steady because of ongoing infationary pressures due to pressure on commodities via China/India and the ability of some companies to pass these costs on. Now of course the key question to bonds is inflation which will be determined by the China's landing going forward in the short and intermediate term, plus the ability of companies to pass on the producer costs to the public. Overall though and to keep it simple, I will throw this out there as a rough guess. Rube

To: glenn_a who wrote (8694)	7/10/2004 10:07:29 AM
From: Perspective	Read Replies (5) \| Respond to of 116555

An excellent post! I'm sorry it took me so long to read it. I haven't heard much emphasis on the last global currency transition, and that is a fine point. I hadn't realized the role that the 1920s currency imbalances (ie bullion flows) had played in fostering the bubble of that era. That does sound strikingly familiar. In my recent K-wave ramblings, I was just waking up to the fact that the whole deflation/inflation debate is the wrong way to look at things. The real question is deflation or reflation. When debt levels have become so high, they become self-limiting and launch K-winter. A key identifying trait of K-winter is the anticorrelation of stocks and bonds, which clearly started in 2000. Then, investors should focus on Winter themes (ie go long bonds, avoid stocks, accumulate commodities on dips) but be on the lookout for Spring. I also realized that the Winter-Spring transition is the most treacherous for the investor as ALL major asset classes reverse direction! Note that this is not true of Spring-Summer transition - commodities remain excellent long plays through all of Spring and Summer, and bonds should be shorted throughout Spring and Summer. BC