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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (5393)	4/10/2006 9:17:11 AM
From: carranza2	Respond to of 218627

A very interesting look at recirculating dollars. The take-away points are (1) the oil producers have collectively displaced China as the financiers of the US current account deficit, (2) the governments of these oil producers have been conservative [crazy Dubai stuff notwithstanding, peanuts in the big scheme, anyway] and are not spending crazily, not yet, anyway, and, (3) perhaps most importantly, the rise in the oil producers' surpluses has not resulted in a corresponding fall in the surpluses of the Asians. There you have it, elmat, the harsh truth. Backed up with facts, figures, graphs and logic. What this suggests to me is that the Asian economies are even stronger than we dream because not even rising oil prices seem to affect their exporting prowess. It also means that a huge transfer of debt and therefore wealth and power, perhaps even larger than the one we think we have been observing, is happening. Military power not backed up by wealth or by the influence it brings, is not enough. A tough guy with too many IOUs cannot at the end of the day afford to be so tough. A better economic position for the US might mean it can threaten Iran more credibly. As it is, it cannot, though the non-Iranian producers are salivating at the prospect of Iranian oil being taken off the market, so perhaps some assurances have been made to the US. The real issue is whether recycling these amazing number of Asian and oil producer dollars into US assets makes any sense from an investment standpoint. I argue "yes", to some extent. The trend makes the dollar worth less, except in the US, and thus there will be profitable investments to be made in the US. But no one puts all eggs i n one basket so gold and other investments will do well, too. In other words, things in the short medium term are shiny and bright globally if Iran does not get attacked. Thanks to higher oil, TEOTWAWKI can be put off in our lifetimes, but Iran's intentions and the US response are critical since attacking it will unleash tremendously disruptive forces we cannot anticipate. The global backrooms of power and influence will be very busy in the next six weeks or so. Keep your fingers crossed. Read about it here: rgemonitor.com