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

To: Seeker of Truth who wrote (54790)	10/25/2004 3:10:43 AM
From: energyplay	Read Replies (1) \| Respond to of 74559

US future : Important to remember that many "US companies" have the many operations in other countries. Large companies like Ford, with operations in Europe and Austrailia, are obvious. Also tiny companies like Vaalco (EGY), with 90% of activites in Africa. So the US Dollar can drop, but the US Stock market may not, especially for the many heavy exporters. Also, the US corporate sector has balance sheets are in very good shape, with the exception of a few mega-companies with underfunded pensions, such as GM, Ford, IBM. Intel, GE, Pfizer, rolling in cash. ******** A much lower US Dollar is a concern for Toyota and Honda, bad news for BMW, and really, really bad news for Porsche. There may be a huge difference in Asia currencies vs. Euro to a US Dollar drop. ******** US future: I expect the imperial activity will decline in about 5-6 years, certainly as the cost starts to weigh in. The anti-imperialists have emerged in both major parties, and are rapidly gaining influencce. The US government debt is likely to be reduced in the next few years, even with continuing operations in the Middle East. The two other concerns are the trade imbalance and consumer debt. Both of these items have SERIOUSLY bad measures in the ususal statistics. The trade imbalance has been overstated by transfer pricing games used to reduce taxes. When the USD gets to about 95 yen and it takes $1.40 to buy a Euro, trade will eventually balance, but expect an overshoot to 92 yen and $1.55 for a Euro. A lower USD will increase profits in US dollars, resulting in incresed Federal government tax revenues. The consumer numbers are based on 1930's thinking. They definitely do not count investment gains as income, or dividends. These measures were devised by relatively poor academics. The regions with large consumer debt loads, 'overpriced" housing, etc. tend to be the East and West coasts, the same areas where equity compensation, and stock ownership is highest. And for the West coast, ownership of non-US investments and precious metal companies is the highest in the US. So while consumer debt levels are higher, they are NOT at a crisis point.