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 : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (9391)	9/18/2006 5:24:38 AM
From: Snowshoe	Read Replies (2) \| Respond to of 219176

TJ, is Africa the next "abracadabra"? Should we be looking for African investments? African States Borrowing More From China biz.yahoo.com

To: TobagoJack who wrote (9391)	9/18/2006 9:42:31 AM
From: energyplay	Read Replies (1) \| Respond to of 219176

I think some variation of muddle through covers 96% of the possibilities, excluding wars, SARS / bird flu, and other extreme events. The depression bust had its' best chance between Spring 2001 and October 2002 - note that 9/11 attacks occured then, about the same time that Enron was blowing up, Providian credit cards had massive losses, and the drag of the tech bust was really hurting. The hyper inflation option : this appears to have ended, at least for a while. I suspect that right after the FED stopped reporting M3 money supply, they started taking the money supply down, or at least slowing its' expansion to a crawl. So we see commodity prices broke the up trend this May 2006, and have been headed down ever since. **** I expect we will get muddle + inflation. Here is about the most infaltionary sceanario I think is reasonable. Actually, this is kind of the maximum inflation imit, since other countries will devalue their currency to avoid being un competitive wiht USD. Let's say the USD drops about 35% in the next 2-3 years. 160 yen per dollar Euro costs $1.75 Gold at 800-900 Japan historically loses some market share in autos at 150-160 yen, and consumer electronic sales slow. The Europeans have real problems selling to dollar zone buyers starting at $1.35. At $1.60, Airbus will need a lot more subsidy, and Porsche, BMW, and VW will be screaming. Import susbsitution and more competitive exports will serioulsy increase US jobs, even in manufacturing. Wage increases will not keep up with inflation, but will more than keep up with mortgage debt payments. So the consumer will be okay, but not great. Federal tax revenues will climb with inflation and increased US economic activity. The budget will get closer to surplus, especailly if there is some political gridlock to slow spending. State governments are already okay - they are fighting in Iraq. Corporations have tons of cash today, and much better accounting. So enough devaluation to promote employment, and the inflationary content makes debt service easier for consumers. ** Are we comfortable with gold going to $ 1200, if it takes 5 yeares to get there ? That's 14% per year. What if it takes 7 years - that's only 10% a year - is that enough ? Especailly is inflation is 4% ? **** This is one reason I am paying more attention to stock picking, and not just macro trends. Oil going to $70 isn't enough, we need a Vermillion that is expanding in Africa, a Peyto that has a long reserve life and heavy re-investment, and there equivalents in mining. Just buying NEM isn't enough anymore. I think the big macro waves for the US and USD have passed. That still leaves growth of China and India, recovery of Argentina, grow in Eastern Europe, instability in Africa and the Middle East, and other big themes.