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

To: Snowshoe who wrote (57843)	11/14/2009 3:49:01 AM
From: TobagoJack	Read Replies (2) \| Respond to of 217588

<<CHINATUNGSTEN ONLINE (XIAMEN) MANU. & SALES CORP. Tungsten Alloy for Gold Substitution>> ... come come, let us not shift the primary responsibility for planetary fraud from america to china, for it would be silly to try. telegraph.co.uk "The new secret weapon to combat deflation - how funny, it looks like a printing-press" because trying is unbecoming. in the mean time, just in in-tray Thoughts on Hugh Hendry,Martin Armstrong et al...AND a vision of the future Though infinitely more articulate (MA is hopeless with grammar,spelling and syntax),I truly believe HH has it wrong and Armstrong's got it right.I understand and agree with Hendry's comparison of global realities to Japan.I use the analogy frequently myself,the parallels are too obvious to ignore.But the policy options facing global leaders could not be more starkly different from the menu of choices available to the LDP in the 90s.Consider that Japan's bubble was largely self-contained,financed by an era of easy domestic money and credit formation which did in part account for their rapid ascencion as an export-led manufacturing powerhouse.When the bubble burst,the burden of servicing the mountain of debts fell onto the collective shoulders of the Japanese people.Having not funded the craziness,foreigners were actually minor beneficiaries who profited from the sale of Rockefeller Center and MCA at silly prices,only to purchase these and other assets back years later when they became true bargains. That was then,but what about the world today? Based on our analysis,global debt hovers somewhere above 11x global GDP,ignoring such annoying things as unfunded public and private liabilities-which would make this iceberg far bigger.This is a staggering problem,and a Martian might agree with HH that the most plausible outcome would be to muddle through these deflationary conditions with very low growth and very low interest rates.How else can the debt possibly be serviced? First,let's consider who owns the debt and who owes the debt in the world today.I think it's well understood that the debtors are in the West,chiefly the USA and UK with a little bit of places like Iceland adding to the mix.The creditors are chiefly in Asia,with a bit of the Middle East and Brazil from a sovereign standpoint.Euro banks also own a sizeable chunk of private sector derivative-related debt.Since a different class of people own the debt than owe it,it is entirely in the interests of the debtors not to repay it.This is totally in contrast to the experience of Japan,where the debts were owed to the Japanese people and there was nothing to be gained from defaulting on them! The options available to the debtors are binary,bankruptcy or hyperinflation.Each is effectively a form of default,but the social and economic outcomes are very different.Bankruptcy involves a painful period of economic contraction and wealth destruction.This is politically unacceptable to both the debtors and major creditors,particularly China.Hyperinflation is the clear and logical choice.Massive quantitative easing that initially shifts the locus of depressionary forces from the USA/UK/China bloc to the rest of the unpegged world (I include China due to it's peg to the $).The ROW doesn't like this very much,and in stage II engages in competitive devaluations of its own fiat currencies.Sometime prior to the entire world devolving into Zimbabwe-like money-printing (3-5 years from now),a new Bretton Woods is called for in which an IMF-like SDR basket of currencies emerges as the new global reserve-and at the insistence of the surplus countries (who've had it with getting screwed) it is backed by GOLD!Gold,which had been trading around $ 3000/oz. prior to the event leaps above $ 5000 on news of this development,completing stage III. We are not witnessing the end of the world.It is the end of the world as we know it.