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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (7335)	5/16/2006 1:01:06 AM
From: Jon Koplik	Read Replies (3) \| Respond to of 33421

John -- this was (literally) the most interesting thing I have read in about five years. Thank you so much for posting it. Jon. P.S. The thing from five years ago ... I did post it on SI here : Message 15671574 P.P.S I have not read it since several years ago, so I hope it does not seem "dumb" now ...

To: John Pitera who wrote (7335)	5/16/2006 10:35:13 AM
From: Hawkmoon	Read Replies (2) \| Respond to of 33421

John.. That was an exceptional post!! I'm going to have to re-read it several times just to digest all the nuances. But one thing I found particularly interesting was how he acknowledged that the US public debt was divided into publicly held debt and intergovermental holdings (Social Security Trust Fund.. etc). And I found it a bit of an "epiphany" to perceive the trade deficit and national debt from the perspective of national assets. I wonder if there are analytical reviews of other leading economies like Japan and the EU for comparison purposes. I understand Japan's national debt is about 140% of their GDP, but how would that compare to their national assets analysis? Especially when it seems that much of their real estate market was halved in value (I recall Richard Koo stated that Japan's real estate market had lost up to 85% of its peak valuation, resulting in a balance sheet recession). Thanks again!! One more reason why I'll never delete my bookmark for this thread.. Hawk

To: John Pitera who wrote (7335)	5/16/2006 6:09:29 PM
From: Poet	Read Replies (1) \| Respond to of 33421

John darlin', I may not post very often these days, but I read you regularly. This was a magnificent-- and a magnificently generous-- post. Thank you for sharing it with us.

To: John Pitera who wrote (7335)	5/16/2006 7:13:31 PM
From: rich evans	Read Replies (1) \| Respond to of 33421

Using assets instead of GNP seems like the right way to look at things. Right now US explicit debt is about 9 Trillian. But 1/2 of that is owed to SS trust fund so is really not explicit, marketable and more like a future unfunded liability . Of the 4.5 Trill real explicit US bonds the foreigners I think I read hold 40% of it or about 1.8 Trillian. I say hold. In effect they have invested that much in US bonds, mostly shorter term and roll it over all the time. They could invest in other things as well in US with their dollars. They have and could buy stocks, companies, real estate etc. All these assets they can invest in and that is why the articles looking at assets is in my judgment correct. On the FED RESERVE site many speeches have been given by the governors on the Current Account Deficit. They all say it is not a problem except in the very long term and is self correcting. The reason they give is that the current account deficit must exactly equal the capital account surplus- that is the investments in the US assets with the extra overseas dollars. Also how you measure the current account deficit is complicated and interesting. It involves many things besides Trade. Buying a US product from a US based foreign company like a car would add to the deficit to the extent the profit was used by the parent overseas. Likewise for all our US companies based in Bermuda, singapore etc.- complicated. Don't worry be happy Rich

To: John Pitera who wrote (7335)	5/19/2006 9:31:03 PM
From: Chip McVickar	Respond to of 33421

Excellent paper... Best I've read in a long time...!!! Thanks for the posting