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

To: TobagoJack who wrote (44103)	12/19/2008 10:04:46 PM
From: Rolla Coasta	Read Replies (2) \| Respond to of 217711

so are you getting out of USD ???

To: TobagoJack who wrote (44103)	12/20/2008 3:17:10 AM
From: Hawkmoon	2 Recommendations Read Replies (3) \| Respond to of 217711

Peter Schiff vents his spleen Man.. talk about Mr. Goldfinger.. ;0) I'm not YET buying the hyper-inflation scenario for the following reasons, although I do admit that we're on the verge of a global effort to attempt controlled re-inflation. 1.) Japan's demographic picture reflects a deflationary liquidity trap. They aren't reproducing fast enough to replace the percentage of population that is retiring. This means that each year consumer spending declines due to demographic declines. 2.) The US just SURPASSED Japan with regard to interest rates cuts. Japan actually had to cut in order to "catch up" and now the pressure is on the ECB to follow suit as well. 3.) In essence, asset prices, upon which many banks based their leverage, have collapsed (especially related to MBS's). Now they CAN'T lend because of their weak capital positions, exposures to CDS', and deflating collateral. Balance sheets have been devastated both on Wall Street and Main Street. And since many of the IB's were 30-40:1 leverage, we're still in the process of taking them down to 12:1 (requirement for commercial banks). But look at the European banks!!.. money.cnn.com Their biggest banks were (area?) leveraged around 40:1 and one (Deutsche Bank?) was around 50 or 60:1 and they had just as much of a real estate bubble as we've had here in the US (and so has China). So there's still a lot of deleveraging to go, IMO. But for some reason everyone wants to focus on the US while ignoring the turmoil in these other major economies. So.. the question is whether Europe has yet to go through what has already occurred in the US? Some folks think so, especially since the ECB doesn't have the same charter as the Fed. So we can only guess what's going to happen in China and the rest of Asia. Hawk