Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (53931)	2/15/2006 3:58:59 PM
From: Chaka	Read Replies (1) \| Respond to of 110194

No, on the contrary, demand for commodities is soaring due to the explosive growth of demand in Asia. I agree with the (Don Coxe) view that anything that is un-earthed (metals,oils) will go up in price due to scarcity while anything that can be produced/manufactured (grains, high tech) will go down in price due to higher productivity, lower labor costs etc. (I believe the above holds even when Dollar's purchasing power is reduced significantly). Now, add in asset deflation (or stagnation) and it is clear the standard of living in the U.S. has to go down. I think the outcome of inflation or deflation is simply dependent on the relative difference of rates between deflation in assets and deflation of standard of living (e.g. if the latter is faster, it is inflation as defined by "general increase in price level").

To: GST who wrote (53931)	2/15/2006 7:58:36 PM
From: KyrosL	Read Replies (3) \| Respond to of 110194

Your belief that strong consumption in China will prevent it from collapsing, if US demand collapses, is mistaken. China has one of the highest savings rates in the world (more than 30%). Chinese consumption as a share of GDP is around 40+%, compared to 70+% in the US. Most of the energy and raw materials consumed in China are used to: 1. produce goods for export. 2. build factories and infrastructure to further increase exports. Converting the high savings export and investment oriented Chinese society to a consumer society will take decades. A collapse in demand in the US due to a collapsing dollar will result in a collapse in China along with a collapse in commodity demand.