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

To: NOW who wrote (19613)	12/27/2004 3:40:53 PM
From: mishedlo	Respond to of 116555

that article was so stupid I will not even ask. If I did, I am pretty sure he would laugh his head off. Perhaps I should send it to him for that reason, but I hate wasting his time. Mish

To: NOW who wrote (19613)	12/27/2004 5:24:34 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

OK Tooearly, Just for you! Mish to Heinz: pimco.com Actually I did not bother reading that myself but someone posted the "final set of recommendations" I thought this set of proposals was so beyond stupid that I am sending it to you only because some asked. Perhaps you need a laugh today. Is today April 1 by any chance? VII. Summary of Policy Recommendations There is a need to immediately implement a number of important structural measures affecting the global participants. Included in this Category I list of critical adjustments to increase savings, reduce debt and improve current account deficit are: 1. Cut by 15% across the board all U.S. social spending programs. 2. Increase U.S. tax rates. 3. Increase incentives to save in U.S. - consumption taxes. 4. Devise capital controls such that capital cannot be exported out of the U.S. 5. Debt renegotiation/forgiveness by countries with cumulative high trade surplus with the U.S. 6. Change the Federal Reserve Bank objective function to include a constraint on the size of the trade deficit. 7. Prohibit sale of highly sensitive technology and defense to any and all foreign countries. 8. Revalue Chinese currency to U.S. dollar by 40 percent. 9. Targeted protective tariffs if needed. 10. Renegotiate WTO. 11. Prohibit the Fed from purchasing bonds from foreign holders of U.S. debt. Heinz: 1. Cut by 15% across the board all U.S. social spending programs. politically impossible, unless one really needs to badly lose an election. 2. Increase U.S. tax rates this would probably be the fastest route to outright depression. as a policy prescription i would charitably describe it as insanity. 3. Increase incentives to save in U.S. - consumption taxes. tax increases, no matter in what guise, are idiotic. they merely shift money from the hands of private citizens to the hands of the state and its bureaucrats. iow, they are a step toward less liberty and more waste. what could POSSIBLY be gained by that? 4. Devise capital controls such that capital cannot be exported out of the U.S. good GRIEF!!! if you want to ensure mass capital flight, that's the way to do it! while we're at it, let's proclaim the return of the middle ages! we've had it too good! 5. Debt renegotiation/forgiveness by countries with cumulative high trade surplus with the U.S. that's going to go down real well with creditors and currency traders alike....LOL. 6. Change the Federal Reserve Bank objective function to include a constraint on the size of the trade deficit. ahem....i have a far better idea. abolish the Fed and introduce a free market money based on gold. and presto, no need for even MORE regulation and regimentation. defcits would self-regulate. 7. Prohibit sale of highly sensitive technology and defense to any and all foreign countries. is there anything this nutcase would NOT prohibit/regulate? 8. Revalue Chinese currency to U.S. dollar by 40 percent. so how exactly do we know a 40% higher Yuan would be the 'correct' valuation? i would have accepted an exhortation to e.g. let the Yuan float (since then the market will determine what it's worth - btw., i'm not sure it would rise...) - but this control freak seems not be happy unless he can get the heavy hand of the state in there somewhere, somehow. 9. Targeted protective tariffs if needed. another great leap forward toward economic depression., and ultimately tyranny and war. it's been tried before - to devastating effect. the Smoot Hawley tariff act of 1930 was the very kick in the teeth that made things go from bad to worse. just what we need! 10. Renegotiate WTO. to what end? it doesn't say WHAT exactly is in need of renegotiation , but judging from the preceding stuff it can only mean 'renegotiate toward a return to protectionism'. see 9. 11. Prohibit the Fed from purchasing bonds from foreign holders of U.S. debt. huh? is this a call for default? yes, default is sure going to be a solution...a final solution of sorts. allow me to add a 12. lock away the nutter who came up with 1.-11. and throw away the key!! the statist philosophy increasingly espoused by PIMCO (McCulley is also a Keynesian at heart) is truly revolting. our political masters couldn't ask for a more sycophantic bunch of willing self-enslavers. an additional comment re. Yuan revaluation: we can be reasonably certain that it wouldn't change a thing....the Yen has gained some 200% since the 1970's vs. the dollar, but i don't see Japan's trade surplus disappearing. if China can make a geegaw for 50 cents that it costs us 10 bucks to make, all that would change after a Yuan revaluation would be that consumers would be paying a little more for said geegaw. iow, we would suffer rather than gain from it... did you notice how inimical all these proposals are to prosperity?