Hi, I'm a noob and in information overload.

Discussion in 'Economics' started by velho, Jan 24, 2009.

  1. velho

    velho

    NOOB ALERT!

    I am diving into this with an average (at best) understanding of economics. But, all the US stimulus made me deeply concerned about inflation / USD weakening and I want to protect my family's assets (and start making some money off investments for a change) so I started reading more. I have been reading a lot of Andrew Horowitz, Paul Kedrosky, Nassim Taleb (who I did find 10 years ago actually), Mike "Mish" Shedlock and John Dvorak.

    Now I don't know much of what to think. I read about Inflation, deflation, stagflation, disinflation, import/export deficits, foreign investment in the US, etc. and possible investments of long gold, yen long, GBP short, USD short, on and on. I'm sure I have some of the language wrong, and I may be so far off track that I can't be saved, but I have some thoughts / questions that I feel I need to understand as I proceed.

    With all countries doing quantitive easing (putting government backing assets or outright spending) can we really have a dive in the USD? Treasuries are still getting sold at almost 0% as people use it as a mattress to stuff their cash.

    China does hold astronomical amount of US debt, but can they really call it? We are a major importer of their goods, wouldn't calling the debt hurt them almost as much as us?

    Which leads me to: is decoupling a thing of the past? Is the world flat and we are all tied together now (with some mostly immaterial exceptions of course)?

    As for deflation / inflation, all I know is that the government is spending like mad and I feel there is still so much bad debt out there.

    - ARMs that look ok right now because interest rates are low
    - People that are just hanging on with their mortgages/credit card debt but could tip over with just a little bit of bad luck (losing their job, cut in pay, health care increasing, etc.)

    I don't think that we have come close to shaking out all those people that have been living beyond their means for too long. So I think credit will be tight for a while.

    What does that mean? Are we deflationary already? How long can it be with $1-2 trillion + being thrown at the problems?

    Like I said, I'm all over the place. If you have any thoughts on anything I said, I'd love to hear it. And if you read this far, even if you don't comment, thank you.