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

To: energyplay who wrote (67184)	8/9/2005 5:51:53 PM
From: Moominoid	Respond to of 74559

If the foreign sub LOANS money to the US parent or another sub, then it's part of all the capital inflow which corrects the US trade balance.... Yes and a lot of trade is between subsidiaries of a multinational too. A trade balance which was partially caused by 'adjusting' transfer prices (for intermediate goods, sub assemblies, etc.) between corporate subs to move income from high tax areas to low tax areas. You got it, but I think transfer pricing in blatant way is illegal at least in some jurisdictions? So capital gains in stock - say Google - will show up in national accounts, but not as personal income, and thus not as personal savings ? To the extent that GOOG retains earnings it shows up as corporate saving. To the extent that the increase in the value of GOOG is due to technological advance that shows up through current earnings and will be accumulated in corporate savings only in the future. To the extent it is just speculation the national accounts will not register it as personal income but will register it as spending and then mark saving down. Now if we make an index of housing affordability based on 'personal income', then places like Silicon Valley will appear unaffordable - but the various Google kids have no problem buying in Atherton... Yes. This is why I won't hold my breath waiting for housing and the US Dollar to fall. USD will start falling again IMO when the Fed stops raising. I think housing does a wave 4 in E-Wave speak in its advance here. Anyway I've borrowed Aussie Dollars and shorted US stocks and bought all kinds of bond funds, so my money is where my mouth is :)