There has to be a global system of fairly addressing government subsidies, protectionism, etc. Absolutely. I agree that this is a problem now. South Korea can no longer subsidize their steel industry, nor can we. Japan will have to break the bad news to their rice farmers that American rice exports can not be curtailed, since American rice costs 1/4 as much as Japanese rice.
Compared to exporting Chrysler's metal stamping presses, or even the cars they could make if factory continues to operate, it is much easier to export brains and information. Thus would you elaborate on "US's advantages" I will help out, to get you started: (1) Fertile farm land - good for producing wheat* and corn. (Whoops scratch that corn part. It will be making alcohol, rather than importing it more cheaply from Brazil) (2) ______ (Please fill in this blank and add (3) etc. if you can. - Others, please help him out too.) I agree with your "bull market" prediction (specifically Dow approaching 15,000 early in 2008) and also predict that in less than two decades, US will be an "agricultural colony" of China and India, supplying them with food stocks. -------------------------- *Other than wheat, is there any agricultural product, suitable for export, that US can produce cheaper than Brazil? I.e. US may not even be Asia's leading "agricultural colony." Oh No! Don't tell me - Canada and Argentina, with complimentary growing seasons, will export the wheat!
Our government will not support the dollar, and doesn't care about inflation. Exporters such as CAT and BA are buys. These things will be bought because they are truly in demand, globally, will be cheaper, on a relative basis (currency wise) for foreigners to buy, and because they help foreign countries reduce their trade surpluses with the United States (nothing does more to keep the U.S from complaining about trade imbalances than purchasing 20 Boeing 777s). We will continue to export raw agricultural materials. ADM is a screaming buy. Gasoline demand will only grow. Tech hardware is beginning to look very interesting. Equipment and technology will help emerging economies ramp up their productivity. Who will provide the tools for this goal?
Unions and lack of trade/closed markets made physical labor artificially expensive in the past. Now, such obstacles have been removed, and physical labor will be the cheapest input cost. I am not making a moral judgment...just an observation. Intellectual prowess and hard assets are now the most expensive inputs.
This topic heading worries me. You realize ByLo that if you looked at my notes from 3 months ago, I said exactly what you're saying now? This is no news. Why are writers NOW writing about it, and with enough conviction to finally convince a bear? What does it mean when news that's years old (emerging nations are becoming huge consumers, Asia is the stock market prop) is being recirculated as new news in a continually changing market? Maybe the bubble's not as healthy as it seemed.
After 35 years of trading I have learned one thing for sure - all markets and all economies oscillate. Right now the US has had a great run for the last several decades. Our GDP puts most other countries to shame. It is sobering to note that about 40 great civilizations have come and gone from dominance over the last 6,000 years. I hope our position of dominance can continue for the next decade or two but nobody can be sure it will. And let's not forget the wild card - the threat of nuclear attack on New York's financial district by terrorists. It only takes a ball of Uranium 235 the size of a grapefruit to wipe out the heart of our financial system. Iran wants to build a cascade of 60,000 centrifuges which will allow them to enrich enough Uranium to make about 30 such atomic bombs per year. I think the odds of such an attack in the next ten years are uncomfortably high. Think what that could do to our economy. It would make 911 look like a college prank. Let's keep our Military strong and aggressive so that doesn't happen.
imo a strong military is synonymous with a strong economy. you have to be able to pay for your offense/defense and shouldn't be dependent on any other country to do so ... especially any potential or recent strategic adversaries so here we have a hawkish, supposedly militarily oriented administration that has been leveraging corporate profits at the expense of our real economic constituency and resources. it makes no sense if the country's real goal is a position of national economic and military strength. the subtext (to me) is most citizens are disposable, that today's corporate profit is far more important than tomorrow's security ... and the appearance of strong hawkishness is much more viable than a position of true common-sense strength maybe my understanding is shallow or biased. what am i missing? we have policies that have acceleratively leveraged the country to the gills, and offshored our real economic assets. how do you shut down real terrorists when you're too busy spending into an incredible ditch on fake ones. it just seems like a wealth transfer system, not a defense strategy