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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (24656)	11/23/2009 5:01:13 PM
From: zamboz	Read Replies (1) \| Respond to of 71456

Feature of Banana Republic: no middle class. We have one for the time being.

To: Real Man who wrote (24656)	11/23/2009 5:03:08 PM
From: Real Man	3 Recommendations Respond to of 71456

Mark Faber on this, some time ago (2006): Explanation of record bonuses: "In the meantime, members of the American elite are enjoying the asset inflation, the printing of money, and the trade and current account deficits, because they keep the "lower classes" reasonably happy and content by allowing them to continue to consume and buy "cheap" foreign goods. In turn, this excessive consumption and lack of capital spending boosts corporate earnings and cash flows, which then benefit mostly the elite, through rising stock prices. Moreover, the weakening currency, which is also brought about by capital flight – another characteristic of banana republics – doesn't bother the elite much because they have the ability to easily transfer their wealth overseas or to fully hedge their exposure to the declining foreign exchange rate. (The aristocrats of banana republics are usually Swiss banks' best customers.) This is particularly true in the case of moneyed elites, which are relatively fixed asset poor and hugely financial asset rich. Let me explain. Compare, say, a farmer who cultivates land that has been in his family for generations with a money shuffler on Wall Street. The farmer is far more tied to his land by tradition, and by his inability to transfer that land and his familiar environment overseas, than is the money shuffler, who will feel equally comfortable whether he lives in New York's Park Avenue, London's Belgravia, or Singapore's Nassim Road. Basically, what I am suggesting here is that the financial sector – and there are exceptions – really doesn't care much for the overall long-term health of an economy; it is only interested in asset prices moving up – no matter how unsound the economic policies might be that inflate those asset prices. So, when things really turn bad and – to use Senator Webb's words – the "bifurcation of opportunities and advantages" along class lines leads to "a period of political unrest", the money shufflers – like so many former leaders of banana republics have done before them – just pack their bags, hop in their private jets, and move to another society where they can start playing the same game all over again! " lewrockwell.com