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Strategies & Market Trends : Picks of the quarter -- Ignore unavailable to you. Want to Upgrade?

To: Mike McFarland who wrote (5483)	3/18/2008 10:35:16 PM
From: Patrick Slevin	Read Replies (2) \| Respond to of 20435

Important differences between now & the 1970s. Some similarities, a declining Dollar, elevating CCI (see Gold, Oil, et cetera). However one very important difference was that people on average had 70% of the equity in their home. You did not walk away from such an investment. That's not the case now. You also had a Baby Boom Generation that was just starting to hit the middle & upper income levels. Today that population bubble is passing through, and shall leave the high spending 45-55 age bracket by the year 2012. Periods in U.S. History where population bubbles pass through are accompanied by weak economies. Wish I could find the reference for that, but I don't have the book here. <I'm 99% cash> Well, if you really, really are preparing for 1970s, you gotta look into hard assets like precious metals or at the very least some form of commodity exposure. But that's my take. I've been Long Gold since the $375 range, and stopped buying gold coins when the value of an ounce crested $450. However, I'm in no rush to sell them, because I still think it goes much higher. Good luck. I think the 70's will look easier than the next decade. Unless you count disco music.

To: Mike McFarland who wrote (5483)	3/19/2008 12:09:48 AM
From: Elroy	Read Replies (1) \| Respond to of 20435

Anyway, my point (if I have one, maybe I am just thinking out loud) is that I have the impression that wealth of all sorts was created in the 80s and 90s. And now that wealth is going to go away to balance things out. Am I nuts? I think the entrance of China and India into the worldwide labor force is the major factor driving the long term world economy these days. The result is the value of labor of all kinds, including blue collar work, is declining and will continue to decline. Americans are just too rich compared to the rest of the world, so as the population of the rest of the world (China and India) rise in wealth, American wealth will decline. In 10-20 years the US (on average) will still be orders of magnitude ahead of those two places, but from the US perspective it will still feel like a decline because the US will have gone from something like 20x better off to 5x better off. Some Indians move to the UAE to get jobs that pay $200 per month, 6 days a week of work 9-10 hours per day. It's amazing! That means that the UAE job, where they are 2nd class coolie boys, is better than what they can get in India near their families. We shall see - the US will remain dynamic and strong because it is one of the few countries where the economic system will tear up and destroy the losers (bye bye Bear Stearns) and replace them with better fighters, but beating the long term affect of a declining cost of labor, and thus declining salaries and declining personal wealth, is tough.

To: Mike McFarland who wrote (5483)	3/19/2008 8:39:04 AM
From: Casaubon	Read Replies (2) \| Respond to of 20435

I completely understand your sentiment, however, the world is a much different place now, then it was then. Literally billions of people are emerging into a technologically oriented lifestyle. This will have profound effects on wealth generation, even if the economy stagnates in certain sectors. There will be cross-currents, no doubt, but remember, holding gold is only a value store (if it is even that), whereas business opportunity is a value creator. It's never easy, though.