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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: skinowski who wrote (109190)	3/1/2010 4:58:14 PM
From: Hawkmoon	1 Recommendation Read Replies (1) \| Respond to of 116555

With the volume of debt - which is still growing rapidly - I'm afraid this is darn unlikely. We'll probably witness big defaults in our lifetime. Undoubtedly we'll see more debt default. Creative destruction is supposedly part of Capitalism. Some industries fade away, or move to a location where production costs are less (eg: textiles, low-skilled manufacturing/assembly work). The QUESTION is how to invest in areas that provide even GREATER productivity and economic growth. Where can loans be extended/invested that will yield the best opportunity for repayment? Some opine that it's alternative energy and in certain areas, I would agree. Ultra-capacitors seem to hold tremendous possibilities, as do low-cost (non-platinum) fuel cells. (query Bloom Energy). informationweek.com Energy independence is a VERY SOUND POLICY GOAL, not so much for climatic reasons, but for national security. Besides, there's nothing that adds to national GDP like something you take from the ground and sell to someone else for a nice profit. The only thing that could top it would be being able to convert 50%+ of the sun's energy and beaming it anywhere on the planet (solar satellites?) Pick your poison -- both a deflationary or hyperinflationary path (or both) involve destruction of money and wealth. Inflation is prefable, IMO (I know Mish is going to chew my @ss over that.. ;0) But preferably, replacing the bad economic failures with equal degrees of economic growth should hold inflation in check. But deflationary spirals, resulting in a liquidity traps, and ultimately tremendous government deficit spending, is far more difficult to recover from, from my perspective. Also, as Mish is espousing, we need to get a handle on the growth of government and free up tax revenues so they can be utilized by the private economy. He's absolutely right about public unions needing to bring their wage expectations back in line with the private sector. HOWEVER, private unions have a place in preventing corporate peonage amongst our labor force. My view is when corporate management demands wage concessions from workers, they must reciprocate with salary and bonus reductions on their part. After all, it's about making the corporation profitable right? So why should workers be required to make concessions while management reaps the benefits? We also need to recognize that a social safety net is critical to sustaining productive skills amongst our national workforce. Welfare must be replaced by "workfare" and when people take money from the government (taxpayer) to sustain themselves, there should be an expectation that the recipient will be expected to provide a service. We're all wondering how to take care of national parks.. etc, etc, and it seems to me that those able bodied individuals receiving welfare should provide community service in return for a portion of their check. Hawk