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

To: TobagoJack who wrote (35696)	6/12/2008 8:09:58 PM
From: elmatador	Respond to of 217576

Truly amazing the analysis we have been reading. The press has missed the plot. Once reality struck they are not prepared to deal with it. They are negating reality. You know the drill: Money piled up out of OECD. Someone concoct a crisis and voila! Capital 'flight to quality'. It never failed. One thing changed this time. I will tell you what changed. The only way to OECD keep its standard of living was to live of the other people's effort. I'm telling you that not because I am analysing today's situation. I am telling you that because for 32 years I have been trying to discover why there are rich people and why there are poor people. It has been my hobby all along. Back to what have been changed this time around: To live off other people's effort, no longer fleecing them once a decade. It was necessary to appropriate of their effort daily. First Export Processing Zones (EPZ). Countries became addicted of the low priced products that they slapped a label on and sold for a profit. But it was dangerous strategy. The people doing that discovered that they could slap their own label and sell their own products. Besides, the industry surrounded itself of parts manufactures that supplied those EPZ's. They had learned the trick. What is called Globalization started as described above. And I was there. Following it every step along the way. Once was only Taiwan, Indonesia, Malaysia and Thailand. But once China stepped in the critical mass went way beyond the manageable. Worse. It was a one way street. Once moved in that direction there was no turning back. What started as a low cost base became economies by themselves. As prices dropped, the consumer of low cost goods no longer was in the OECD countries. The new generations that entered the work forces were much more ambitious that the ones that toiled in sweat shops. They were looking further afield. As a result of the drop in costs, a big amount of consumers were no on the market for goods. As a result, the US, because a consumer of 20% of what is produced. No longer could swing economies into growth or no growth at its own will. Thus decoupling happened. As it progressed, the materials and energy to propel the new industry supplying this huge market, increased in price. A bottle neck appeared. The bottleneck is result of 25 years of no investment in infrastructure in the dilapidated economies that exported their capital. Only to cleat that bottleneck, per se, requires huge amount of capital. And the capital is available and coming to develop new resources. It is a no brainer. Build and you sell. Guaranteed. Because this is no cycle. This is structural. A cycle, but it will last 25 years. There are analysis, that wake everyday, looking to the landscape and trying to find the evidence that there is a trigger for a capital flight to quality. Every month or so –since May 2006- they try to see it. Unwind of Yen carry trade. Yes, it was supposed to suck capital and would bring economies to halt. It already dawned in many that carry trade or no carry trade, the economies are progressing. China will slow down. China will cool down. Have you seen it? I have not. There are guys saying: After the Olympics it will. I am not holding my breath. Since nothing has dented the growth, should they not start trying to find causes elsewhere? Read different books? No. Now it is this, and this is really nice: Inflation in emerging markets-and their increase of interest rates- means their growth is not sustainable. Has anyone sought the causes of the inflation? Know why they are saying that? Because fighting inflation needs balls. Cujones. And those pussies, exactly because they are castrated, they cannot face it. Therefore, they say: the ones fighting inflation -which is demand inflation down here where I am, mind you- will stand no chance. Their growth will slow. We are skyrocketing here with 11% interest rates in case you have not noticed. It is been a nice ride. I am laughing all the way. And there will be many more egg-splattered faces as we move along.