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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (22600)	12/10/2004 9:42:59 AM
From: Sun Tzu	Read Replies (2) \| Respond to of 23153

The real problem is that most doctors know little of pharmacology or even physiology. A proper educational system will require doctors to upgrade their pharmacology knowledge at least every 3 years and rehash their physiology every 5 years. There is no need for "free" education from corporate America.

To: energyplay who wrote (22600)	12/10/2004 3:43:15 PM
From: kodiak_bull	Read Replies (1) \| Respond to of 23153

Bill Gross on the fate of the dollar and its consequences. A couple of paragraphs: John Snow and Alan Greenspan have finally bowed to the inevitable. Instead of blocking the lane in defense of a Shaq Attack slam dunk, they have politely if somewhat obfuscatingly stepped aside. “Put it down brother” they seem to be saying, but it’s the dollar and not a round ball that they’re referring to. The dollar has gone down. The dollar is going down. The dollar will continue to go down because it’s the easiest way out (for the U.S.) to begin to rectify its imbalanced finance-based economy. Balance the budget? Fugitaboutit. Raise interest rates to historic norms? Fugitaboutthattoo. “Let the market decide,” Snow says. “Likewise,” chimes Greenspan, warning that sooner or later foreign lenders will not be so exuberant in their purchase of U.S. Treasury bonds. Perhaps they’ll be a little less “irrational” with their money he might have thought, but that’s a word he doesn’t use anymore. And so the market’s most crowded trade – short the dollar – will inevitably become a little more crowded, perhaps “irrational” itself at some point. There is a whiff of crisis in the air. How the world came to this point is well documented in some journals, including this one, but it bears repeating if only to reacquaint pre-Alzheimer candidates and those with “senior moments” such as myself with the facts. The U.S. spends too much; eats too much; drinks too much; TOO MUCH, (thank you Dave Matthews). And we pay for it with our debt and 80% of the world’s excess savings. In so doing our creepy crawly balance of payments deficit has inched its way up to 6% of GDP – a level never seen in the U.S. and reflective of third world nations in financial crisis. The imbalance has been tolerated by those nations on the surplus side of the ledger – read “Asia” – in a strange sort of mercantilistic Faustian bargain that promises China and Japan the benefits of a strengthening economy now for the perfidy of falling dollar denominated Treasuries bonds later, an arrangement that once again will prove that there is no free lunch, or that hell often follows heaven on Earth. There are those that argue that this tidy little bargain between debtor and creditor nations can go on for a long, long time. Since each party gets what they want – the U.S. to consume, and Asia to produce – who’s to say when the first player will opt out? For now, China’s rather introverted geopolitik allows them the flexibility to revalue their Yuan whenever they damn well please as long as their inflation rate behaves. Japan is beholden to the U.S. militarily and continues to struggle with deflationary pressures. That argues for at least jawboning its Yen lower. “Dirty float” is and likely will remain synonymous with Japanese forex policy. So there seems no immediate incentive for either China or Japan to opt out of their Faustian bargain. On the debtor side, the U.S. will shop ‘til it drops – pure and simple but that phrase up until now has always accentuated the “shop” and conveniently forgotten about the “drop.” The drop comes when this comfy cozy current relationship between giver/taker, consumer/maker for some reason ends in divorce. The only question is one of timing. At some point, as Greenspan so astutely pointed out, “foreign lenders will eventually resist lending more money to the United States, causing the dollar to drop further.” What he didn’t say is that will be the point when the shopping stops and the fun goes out of a trip to the mall. That’s the point when U.S. inflation heads gradually but inevitably higher, and that’s the point, of course when interest rates move into harm’s way. If it seems strange that Treasury Secretary Snow and Fed Chairman Greenspan are actually encouraging this weak dollar policy, one can rationalize that they’ve seen the end game and they want to ease their way around the pileup. Better to talk the dollar down now before the balance of payments gets so bad that a true crisis is inevitable. I cannot disagree. And as mentioned in my opening paragraph, alternative solutions to the problem are “pie in the sky” unimaginable. For Americans voluntarily to begin to get the old time religion of saving more money is beyond dreaming, especially with employment so weak and the source of historic capital gains – stocks and houses – still above cost. Likewise a Bush Administration seems unlikely to move towards a more balanced budget with its aggressive legislative agenda which includes social security reform. Optimists tout the escape route of faster foreign growth to suck up American exports but Europe has caught a congenital case of influenza, Japan is back to the zero growth line and China is maneuvering for a soft landing. My point is this: dollar depreciation now, and Chinese Yuan revaluation as soon as possible is the easiest first step to rebalance an imbalanced U.S./global economy. This realization is and has been as close to a slam-dunk as we have seen in the world of finance; slam-dunkier than calling the stock market top at NASDAQ 5000 or Soros breaking the Pound Sterling. You can count on it (the Dollar going down against Asia)– not that there won’t be frantic short squeeze reverses even as this Outlook is being written, or that against some currencies (the Euro) the U.S. dollar actually may be cheap. Full link: pimco.com