SouthAmerica...I can understand your excitement, and trust me, Brazil is one of the economies I will be investing in myself when the global recession comes to a close, but there are 2 facts which are becoming more and more true. Number 1: No matter what people would wish, the world economies are becoming more and more correlated with each other. It doesn't matter if Brazil moves away from dollar denominated transactions. Those currencies you "connect" to are influenced and influence the dollar. In today's technological world where currencies are traded electronically, and today's world where the barriers to start a company are becoming smaller, somebody in some country is going to find a way to do something cheaper. This correlation is going to be global. What is developing is a "butterfly effect" on world economies. (I just made that up too..haha....I think I'm the first to make that comparison...probably not though...haha). Everybody is connected to everybody and influences everybody. Secondly: China wants one thing from Brazil and I hate to be frank but.... Your commodities (which it can't produce) and to steal your technology. It doesn't want your manufactured goods or anything else. This relationship with China will be pretty much one-sided. Mark my words. China will help to prop up your economy and then try to rape it through unfair trade practices as it has tried to do with the US economy. If Brazil resists, then the trading relationship will never grow and all Brazil will ever export to China are its commodities. (If a protectionist war doesn't develop first). Mark my words on this.
Your analysis and predictions, SA, agree with my own. Now if one could only accurately predict the rate at which these events will unfold we would have something really useful. The US depends on the "kindness of strangers" to allow its consumption to outpace its productivity. How long can this go on? A very long time i would guess. But eventually the US will no longer be able to borrow and print its way to "happiness."
. Tradestrong: Secondly: China wants one thing from Brazil and I hate to be frank but.... Your commodities (which it can't produce) and to steal your technology. It doesn't want your manufactured goods or anything else. This relationship with China will be pretty much one-sided. Mark my words. China will help to prop up your economy and then try to rape it through unfair trade practices as it has tried to do with the US economy. If Brazil resists, then the trading relationship will never grow and all Brazil will ever export to China are its commodities. (If a protectionist war doesn't develop first). Mark my words on this. ***** January 11, 2009 SouthAmerica: You said: âThis relationship with China will be pretty much one-sided.â You did not read my 4-part article about âChina investing $200 billion dollars in Brazilâ â If you had read that article then you would know that the relationship between China and Brazil would be at an equal level. Remember it is not only China that wants Brazilian technology Brazil also wants Chinese technology in many areas. By implementing my economic development plan in Brazil with money borrowed from China the Chinese would be helping lift the boats to over 200 million Brazilians and creating a nice new market for their products. The larger the new middle-class in Brazil the more products they can buy from China and vice-versa. It is easier to build an infrastructure and create a middle-class for a country such as Brazil with a total labor force of about 100 million people than in a country such as China with a population of over 1.4 billion people and a labor force of 800 million people. A rising middle-class in Brazil would consume more products from China in turn helping create more jobs in the Chinese economy. It is a win-win situation for everybody. Brazil doesnât have only the resources that I mentioned on that article, Brazil has a beautiful coastline from north to south and the Brazilian beaches are great. I have not met yet a person who did not love the food in Brazil from feijoada to churrasco, in general Brazilian foods are delicious including the deserts. You can find the most beautiful woman in the world in Brazil and we have a lot of beautiful women around. Brazilian fashion and design is becoming very popular. Brazil is becoming well known for its design and creativity not only in fashion but also in business. The more business Brazil does with China the better, and we can develop a very large tourism business between Brazil and China in the coming years mainly after Brazil starts opening casinos in new up-scale shore resorts similar to the French Riviera along the magnificent and beautiful coastline in Brazil. You can bet it will be a relationship of equals, and both countries can grow to its potentials and prosper beyond anyoneâs imagination. Brazil and China will become the rising stars and powerhouses of the new millennium. By the way, last night I had dinner with a group of Brazilians and during our conversation a fellow Brazilian told me something that I was not aware of regarding what is happening in China in the area of shoe manufacturing for the export market. I had mentioned on my postings on this forum what happened to the shoe industry in Brazil and how almost overnight the Chinese destructed that vibrant industry that we had in Brazil in the 1970âs and 1980âs. After the collapse of the shoe industry in Brazil many of these Brazilian shoe manufacturers opened operations in China. Going back to my fellow Brazilian that I met last night â a few days ago he saw news from a Brazilian source saying that right now a large number of shoe manufacturers are closing operations in China for one reason or another, but many of the surviving companies in China are the Brazilian manufacturers that were forced by Chinese competition to move their operations into China. Brazil and China should move forward with a complementary economic development plan such as the one that I proposed on my article. The new Barack Obama administration will concentrate in figuring out how the new economic system that the United States has adopted in 2008 will work in the future and at the same time they are going to inherit the Perfect Storm and a wrecked economy in every sense of the word. The Barack Obama administration has a lot on their plate and they will need to figure out how to reconstruct the US economy from the ground up and they will concentrate in fixing the US economy the best way they can. Regarding international business a Barack Obama administration probably will pay much more attention to the African Continent and see what the US can do to help develop the economies of many countries on that continent. (Africa has a vast amount of under developed natural resources) I will be very disappointed if Barack Obama does not try to help the African countries to help develop their economies and lift the boats of the population of that continent. Barack Obama is becoming US president at a time when the US economy is imploding and spiraling out of control and we are entering the first Great Depression of the new Millennium. The American people and many people around the world have unrealistic expectations on what Barack Obama can do when he becomes the new president of the United States â and all these people are going to be very disappointed when Barack Obama canât perform miracles â since at this point only a major Miracle would help turn around this massive mess that we have in the US economy. Barack Obama is surrounding himself with an outstanding economic team â but these people also canât perform miracles. ***** piezoe: Your analysis and predictions, SA, agree with my own. Now if one could only accurately predict the rate at which these events will unfold we would have something really useful. The US depends on the "kindness of strangers" to allow its consumption to outpace its productivity. How long can this go on? A very long time i would guess. But eventually the US will no longer be able to borrow and print its way to "happiness." ***** SouthAmerica: Americans still are in denial, but the party is over and you can bet on that. The rest of the world will not allow the United States to continue the international monetary game of the last 50 years. The world has changed in ways that most Americans have not realized as yet. The rest of the world are not stupid and they will adjust accordingly â we have reached the end of the line for an international monetary system based on the US dollar â mainly now that the value of the US dollar is being turned into CONFETTI. The game is over; the US economy and financial system that we knew no longer exists. The United States has adopted a new economic system that I am still not sure how the new system is going to work in the future. In the 12-month period October 31, 2007 to October 31, 2008 global stock markets lost US$ 30 trillion dollars in value. People from around the world blame the United States for this massive loss in stock market wealth. An article on January 9, 2009 on The Financial Times (UK) about South America said: âAcross the continent, the crisis has brought about a large-scale destruction of wealth. Claudio Loser, a former western hemisphere chief at the International Monetary Fund, calculates that 40 per cent of Latin America's financial wealth was wiped out in the first 11 months of 2008 through falls in stock and other asset markets and currency depreciation." (The loss in wealth is estimated to be around US$2.2 trillion dollars.) These are severe losses for a very short period of time, and people are pissed around the world â and they are a bunch of fools if they donât have a major overreaction to this intolerable situation, and the only way to correct this mess is for the major economies from around the world to develop a new international monetary system that takes in consideration the new economic realities of the global economy of the 21st Century. Keep in mind many emerging countries around the world including countries such as Brazil had been working very hard for many years to build a very sound economy and a very healthy government balance sheet and almost overnight everything went up in smoke because of the reckless economic and financial policies in the United States â a country that has a very special status in the global economy because of its currency and because the current international monetary system is based on this collapsing currency. (For all practical purposes the US dollar is in the process of being turned into Confetti.) .
. January 30, 2009 SouthAmerica: I knew that the American economic system was completely broken for many years and it was approaching the meltdown point. Here we are at a major turning point in US history and most Americans donât have a clue about how serious the US economic situation is today; they donât know that the Obama administration is running out of options at this point and that they have just about one shot to put an economic package together to prevent the US economic system from a complete meltdown. I am not surprised that the American politicians, most television talking heads, all kinds of Washington Lobbyists, and so on â with rare exceptions â think that it is business as usual. It seems to me that it is complete madness in Washington, and most of the commentators on CNBC, MSNBC, CNN News, and so on are all in La La Land. The US economy is imploding and spiraling downward at a faster pace in a Perfect Storm as all kinds of negative news are feeding on each other and making things worse by the day. Unemployment is skyrocketing inside the US economy and it should get a lot worse in the coming years with millions and millions of people losing their jobs. The real estate market is deteriorating and real estate prices should decline at least another 20, 30 percent or even more in the coming years. About 2 weeks ago I was reading an article â I donât remember if it was on The Economist, The Financial Times, or Business Week â one piece of information called my attention: the article said that about 65 to 70 percent of all the real estate properties that ended up on the books of banks because these properties had been foreclosed were not in the market to be resold. Just imagine if the banks decide to flood the market with all these real estate foreclosed properties that they are already holding and how much further they can depress real estate prices. And never mind the new wave of bank foreclosures that are happening right now around the country. ***** Right now they are talking about the US government creating a good / bad bank â wherever that means. But I donât know why they have to create a âBad Bankâ when we already have Citi Group, Bank of America, the Federal Reserve, and many others. Some senior executives of major US banks such as JP Morgan Chase are whining about the US government nationalization of US major banks such as Citi Group, Bank of America, and many others â Instead of whining and begging for US government intervention then these bank executives should find a market solution to resolve the massive current banking crisis in the US. I wonder why the US taxpayer should absorb all the toxic assets that all these geniuses created on Wall Street? Why clean up all these banks of their toxic assets and leave these institutions on the hands of the same idiots that created this mess in the first place? Talking about incompetence: Wall Street and most of these bankers have trillions of US dollar in losses all over the place and a major international financial crisis to show how bad and incompetent they are. Today for all practical purposes banks such as Citi Group, and Bank of America already have been nationalized by the US government, and there is more to come. Both of these banks are insolvent if they write off the toxic assets that they are holding â what the US government is waiting for to take over these banks? No more taxpayer money to bailout these banks. Or they find a market solution for their troubles or the US government should nationalize all these banks and fix it. As the US economy implodes trillions of extra losses will emerge making the Perfect Storm even worse. That is how a country descends into a Great Depression one step at the time in a constant imploding downward spiral. .
You nailed it again !!!! Keep up the good work !!! ......................................................................... What is most difficult it seems is for those that have entrusted retirement assets that will be eliminated....as well as many other "dear to the heart assets" are in jeopardy....and the fact that there is no "real" way to replace "heart break" assets.... This is akin to watching the innocent being slaughtered as one watches.... ......................................................................... What is really very telling is that "the brilliant" do not get the math.... Simplistic example.... Losses: > $30 Trillion Political contribution: $4 Trillion The fact of the matter is that the "political talk" rescue is only a fraction of what has been lost.... Thus how can it be effective ? ........................................................................... What government should do is to help the "banking valuation" side.... Make no mistake...Over 50% of the people will be basically tax exempt....maybe more....and if taxes are to be raised....they will be raised from a declining base.... What would be better is a model which allows for the tax base to grow....and not to dwindle.... This would be a "consumption tax only" structure.... This would mean that jobs would flock to the US.... This would mean that valuations which are dearest to the heart of bankers from which loans are made ....would skyrocket.... This is the direction that the US Government needs to go.... Thus there are some good things left to do that will dramatically effect the US economy to the upside.... The current policies are in the direction of going after.... and being causal of a dwindling base....
. February 20, 2009 SouthAmerica: The US government should nationalize the Zombie banks such as Citi Group, Bank of America and many others ASAP, before the current management deplete the few resources that still are available on the books of these banking institutions. At this point there is no doubt that these banks will be nationalized. The only question is: When? The sooner the US government bites the bullet the better for the taxpayers who will hold the bag and pay for the massive losses caused by these banks. The longer the US government waits for the nationalization of these banks, the more the current managements are going to gut these institutions since they know that the inevitable is on its way â the massive nationalization of Zombie banks in the Unite States. .
. March 2, 2009 SouthAmerica: On January 1, 2009 I posted on this forum new predictions âEconomic Forecast For US Economy for 2009 and Beyondâ â and I said the following: âThe current US stock market averages (Dow, S&P and Nasdaq) reflect manipulated information, and is being kept up by artificial means. These averages should be down at least another 20 or 30 percent if the Hedge funds start letting people redeem their investments, and if people start trading based on the reality of coming company earnings and a fast declining US economy with fast increasing unemployment, and new levels of financial crisis as many companies file for bankruptcy, and new financial scandals come to the publicâs attention. The averages closed for the year of 2008 at: Dow = 8,776.39 S&P 500 = 903.25 Nasdaq = 1,577.03 The new Obama administration canât produce economic miracles overnight, and during the next 2 years at any point the averages should reach a new low along these ranges: Dow = 7,000 to 6,000 S&P 500 = 750 to 650 Nasdaq = 1,250 to 1,100 ********* I guess the downward spiral is accelerating and it took only 2 months for the market to reach these new lower levels. It seems to me the US economy is imploding at a rate faster than anyone expected. .