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

To: elmatador who wrote (27060)	12/30/2007 12:40:54 AM
From: TobagoJack	Read Replies (2) \| Respond to of 217764

<<Biggest problem is to readjust the economy from a consumer economy to a exporting one>> that means the evangelicals will have to sell, and grovel, instead of preach and snort - tough transition - think cb ilaine having to fill a jar of tomato paste bound for italy instead of lawyering and talking about importing italian olives:0) chortle cackle snort and again

To: elmatador who wrote (27060)	12/30/2007 7:19:01 PM
From: prosperous	Read Replies (1) \| Respond to of 217764

>>US won't suffer too much. The real pain will fall in Europe. The US has an economy that can be geared for export at competitive prices as USD reaches 2/Euro. 80 JPY/USD. Parity with BRL. RMB 5/USD. CAD.50/USD. The US then becoems a export juggernaut. But Europe will be have a mayhem.<< I agree this is likely a good preview of things to come in the future. The mechanics of how and when we get out of the current complacency mode is the question. Between the government, consumer, and corporate entities it seems the one to first show fiscal responsibility will be the corporate sector while the govt and consumer continue on their fiscal spending binge. The corporations have shown more restraint by not turning on hiring liquidity taps, larfe salary increases for masses etc. In conjunction with the consequences of higher inflation, weaker dollar, etc this means the consumer spending on key sectors depletes and the job losses start there. Without job losses, the game can go on for a long time with gradually deteriorating living standard; however, job losses will accelerate the cleansing process. The losses would start in sectors most dependent on discretionary consumer budget which is under increasing pressure with inflation. Once that starts it may be a rapid slide downhill. Its not clear yet if we start seeing that in 2008 or 2009, until then we will see gradual erosion of the dollar and inflation rising with some job losses and in rise in inflation. Your other comment on US coming out OK out of this also sounds about right; the Europeans are likely to be at the receiving end of a long shaft with high Euro keeping a lid on their exports and employment. Currently US stock markets are upbeat and the shareholders are putting a lot of pressure on CEOs to show good earnings which they are doing in many cases by improving the bottomline, that is, exporting jobs outside US and reducing costs, that trend will continue so long as the stock prices are high nominally and we may see gradual job losses for a while. Once the cleansing starts, the stock market will correct significantly; the positive side of this correction is that at that point the dollar is weak making exports more viable and the pressure on CEOs is reduced to export jobs outside US (the shareholders have already seen values fall by 1/2 and taken in the shock of their net worth going down); the recovery process starts at that time and in a preverse way US seems to be on track fastest toward that in the current competitive currentcy devaluation game that Europe has chosen to sit out. What we need to be watching now is for cracks in the system that points to either something blowing up or inflation appearing in govt stats and interest rates start to go up. Until then we will probably see current status quo: dollar down, gold/stocks up, real inflation up, consumer spending under pressure, gradual job losses through outsourcing; a crack in thie status quo will accelerate things in other direction to start a rapid cleansing process that you allude to and then reecovery process via exports etc.