I rarely post shit like you do. Just for the hell of it, I took a look at your last 20 posts. They were all political gems like this one: What is that famous saying? "All we have to fear is the fear that the right-wing losers vomit all over America"! Loads of value there Einstein. Lately I've been active in the economics forum discussing the China/US situation since you are calling me on it. And BTW, I only mention degrees when called on my knowledge of the subject as well. All my posts, other than replying to the occasional unprovoked personal attack from trolls such as yourself, are valid discussions of the topic in the thread. Just to be fair, and not cherry pick any of my previous posts, here is my very last post this morning previous to this one (again, only posting this because you are calling me on it). I would say its a valid discussion adding to the China economic nuclear option thread: "I agree with some aspects of this post such as the decrease in standard of living in debtor nations such as the US. But back to your original post, it will be many years before China will be able to shift to a consumption society for various reasons. Roubini thinks it will take decades (I can post a link to several articles discussing this if you wish). Bottom line is their rapid growth has been due to cheap imports created by slave labor wages, and an under valued currency. In addition, their extremely low GDP/person allows them rapid growth on a % scale at this point in their development. This will become much more difficult as they grow. Wages will rise, the Yuan will appreciate, and the cheap exports will be more expensive. China will inevitably become more consumption based, assuming they don't implode first. There is a very real possibility of this even if the the general US populace thinks China will take over the world. The Chinese government has just announced a half trillion (yes trillion) dollar infrastructure program because they are so paranoid about employing their people. Anything below 8% growth and they are screwed. There is no doubt about this, its a make work program, although it will greatly benefit the country for years to come. That is not why they are doing it however. Luckily for them, they currently have the cash. In a few decades China may not be so dependent on the US, and may well be the world economic giant, but don't hold your breath. In the near term, they absolutely need US trade. Other countries can in no way spend enough as a substitute, and if the US is not purchasing in a major way from China, they won't be doing this with other countries as well. Countries that need this trade to buy from China (Japan, S Korea, Brazil, Canada, etc). I would say that for at least the next 10 years, IMO, when the US sneezes..... Including China." Bottom line Ice, is I take this site seriously, and have since I found the site in 2002. Its jokers like you that ruin it for everyone. Welcome to my ignore list. PS the series 7 was ridiculously easy. Nice try.
I was wrong and I apologize to you! p.s. I know a lot of seemingly smart guys and gals who did not pass the series 7 the first time and I thought it was not easy)
As in jack them up? No, absolutely not. Deflation and contraction are the real risks now. Interest rates will remain low, and spending will be massive, by other countries as well as ourselves. There is a real risk of hyper inflation down the road; however, since we will be printing so much cash, and that in itself could lead to higher rates regardless of what the FED does. This is at least a few years away imo, and if the spending is curtailed once the global economy stabilizes, then its not a problem. Unfortunately, the elasticity of government spending is sort of like the elasticity of wages. Once wages get to a certain level, its damn hard to lower them. It is quite possible that gov spending will react so slowly to improving conditions, due to political reasons, that we will be in another serious pickle.
Please explain in "economic" terms what the word "risks" means as you utilize it in your post. What is the risk. That we all have to "suffer" or "muddle through" some tough times or some very tough times? Isn't that implied in many or most basic economic models (that you know far more about than I for sure) !?
Iceman you could have an IQ of 175 but 99% of your posts are childish liberal insults. I am not proclaiming my grand intellect I am just pointing out that all your posts are insults against the opposite party and opposite beliefs. What do you want, total facist liberal rule?
just like Bush, Obama has been set to pass laws that further increase their power over your pathetic lives you don't have to believe me, because even if you did you couldn't do shit about it, it's already too late, so it is best for you to just deny it
But what if the paradigm shift is the 1930s, not the 1970s? If there's a true multi-year recession/depression, bonds will do well - especially the shorter durations e.g. 5 years. Look at how JGBs performed in the 1990s - secular bull market all the way, despite Japan's debt going to 100% of GDP and higher. If earnings are collapsing, demand in the toilet, credit in shortage, and real estate in the doldrums, where are you going to go other than government debt? The dollar is in a rampaging bull market - Asian central banks are not going to put money into currencies on the periphery, that could lose 50% of their value in a few months, or the Euro which (they perceive) may not even exist in 5 years. Short bonds *requires* the stock bear market to be over. Right now I think that is the odds play, but it is folly to think that a further continuation of the bear market is impossible. If the bear market continues, and we get a 1931-32 scenario, bonds will be the place to be.
I do think the equities market will make a new low within the next 60 days, so if this happens we will have to see how far the next leg down runs! :eek: BTW, this would all take place before obama is even in office......then the real fun will begin! :eek: