.... jimmy............ u know, just because people prefer to remain silent doesn't mean this article isn't just a completely idiotic litany of old griefs, false predicates, reverse realities cum complete bollox..... its just because it gets tiiiiiiring... is that the 1st time u come across that sort of junk literature??? i mean, the austrian theory of money?? puh-liiiiiizzz.... we've moved on guys, thats a framework thats barely ok to understand economics of the stone age... anyway, you believe what you want, if everybody thinks the same, there is no market... and if there is no nostradamus to scare the shit out of the dumb money at every twist & turn, how am i gonna make any??? ciao ciao
instead of reading these pathetically daft attention-seeking armchair 'economists' with no track record of money management whatsoever, check out doug noland at www.prudentbear.com for instance, if you want to at least 'understand' the bear case, without all the 'bozo' noise... also understand, it's just a view, of what worse case scenarii might be, say if india nukes jerusalem (old town, new town, the whole bloody lot) by mistake and the arcturians decide to attack earth at the same time... until then we shld be ok methinks ;-)
2cents, I appreciate the link you gave, and I intend to spend some time on that website. I do not believe that the ability to trade profitably makes anybody an expert on the issues raised by this thread. I am more interested in the quality of a person's argument and evidence, in regard to the subject of this thread, than I am in their trading trackrecord. I must say that I find your counterargument, to the article, extremely weak. I am not saying you are wrong. I am not saying the article is right. I am only saying that you have failed to make any persuasive or rational argument to support your position. I repeat, however, that I do appreciate the link you provided, and I will spend some time on it.
jimmy, i didn't say that... i am talking about real hands-on experience with money, not necessarily managing a portfolio... take a quick look at this perhaps, just to get an idea of how complex it can get to 'disprove' such and such 'theory' http://www.gmu.edu/departments/economics/bcaplan/whyaust.htm ... whereas it is not necessarily as difficult to come up with a theoretical framework of some sorts... and fan the flames of fear, greed etc... ever thought about that? that's been happening for a couple thousand years only, or more... ;-) more practically, the austrian theory of whatever, e.g. as aptly summarized here http://en.wikipedia.org/wiki/Austrian_Theory_of_the_Business_Cycle simply fails to understand that banks are businesses same as a potato factory or your butcher round the corner, or rather your Hertz car rental perhaps... if car rental inflationary expectations start materializing, do you believe Hertz will know before you do? do you believe they will take early action way before your expectations have even started to raise? I mean, of course entrepreneurs fail, overshoot, pussyfoot all the time, and bankers are no exception, but bear in mind, how often do you see a complete industry sector collapse totally out of the blue??? what figures today are pointing to anything that would even hint at a potential collapse sometime in the future? (plse don't serve me the moronic exemples of the dual deficits etc, those have been discussed to death and beyond, and nobody's still lost any limbs)
ok its true i haven't even tried... take a look at this http://www.elitetrader.com/vb/showthread.php?s=&postid=1043207&highlight=oil#post1043207 http://www.elitetrader.com/vb/showthread.php?s=&postid=1103813&highlight=oil#post1103813 http://www.elitetrader.com/vb/showthread.php?s=&postid=1041166&highlight=oil#post1041166 there's more but i suppose u now understand what i mean when i say it gets tiring...
'I am only saying that you have failed to make any persuasive or rational argument to support your position.' No serious market player one has time to provide you with phd type counter arguments let alone read the whole article word for word.
Geee, this must be a new line of deffence. "We have arguments, we are just too busy trading that we don't have time to refute you." Let me tell you, I like this kind of reasoning!!! As for 2cents, one doesn't need to be a successful moneymanager to understand global economy. Those 2 are different matters....
for the second time in this thread, thats not what i meant, learn to read in context!... what i am referring to here is an understanding (or better, hands-on experience) of how the management of MONEY, an asset class in itself, under all its forms including the standard aggregates, via all available tools including issuance, banking reserves requirements setting etc etc, by central banks and the banking systems in inter-related economies, impacts and 'regulates' the functioning of the global economy ... bunch of armchair football coaches if you will, who've never even played pro themselves, your 'austrian' theorists... i hope that clears the misunderstanding, as i already attempted to do in the previous post...
All of these factors you list are relevant to a higher-level understanding of international monetary flows, but they aren't the causes of the flows. It's like aninvestment bank and an entrpreneur who's built a steel business. The bankers are smart and know alot about how steel businesses trade, how the market reacts to them in different scenarios, and how to market, float, and advice steel companies. Consultants are the same way - they can tell you how to theoretically improve your business. None of this is related to the actual operation of the business, nor the vision and motive behind the business. I think that's important to understanding how the arguments put forth in the paper relate to more the more academic details of exchange rates, international trade relationships.
I don't think jimmy is looking for a phd level thesis to disprove the theory presented in the paper. I for one think this is an extremely relevant topic about global hegemony and what major events may occur during the next 50 years. In case you haven't noticed, politics and economics are inseparable and the better you understand one, the more insight you have into the other. 2cents, I think the mistake you make, and the mistake alot of "smart" people make is assuming that you are operating in an environment of full transparency. How can you assume that you know all of the facts? Only arrogance or ignorance can allow you to believe such a thing. This is a time when one truly needs to "think outside the box" because, unfortunately, the current administration has alot of "out of the box" plans, as empires and very powerful governments have always had. The only difference today is that the public has much greater access to information via the internet and "instant media" (i.e. streaming news, breaking news video, etc). Hindsight is 20/20 and future generations will look back at Americans of today and wonder how you had your heads so far up your @$$es that you twice elected a President who has completely ruined the reputation and relationships of the worlds only superpower, all the while weakening it... i'm ranting. Some of the opinions in the paper are just that, opinions. However they are based on facts that cannot be refuted. The iraq war was about oil, not weapons of mass destruction. The WMD argument was a political tool to occupy and pacify the minds of the simple public (this includes congress and the majority of the senate). We now have the benefit of hindsight and the truth is obvious. - Iraq was the 3rd most productive OPEC member behind Saudi A. and Iran - Saddam and Bush sr. were enemies because Iraq was the OPEC member who was most resistant to pressure from Washington - Iraq advocated cartel-like OPEC policies to drive up the price of oil in order for OPEC countries to benefit more from the relationship - US onshore oil fields peaked in the 70's, and there are no undiscovered onshore oil fields. In addition the only undiscovered oil fields in the Gulf are in deep water, which are hugely expensive, time-consuming, and risky to explore/develop. Such is the case with North Sea oil fields, and the Canadian sands are extremely expensive to develop, plus the crude is of lower qaulity, yielding less product - Combine the last bullet with the fact that before the Gulf War(s), Iraq was the most unexplored of the OPEC countries. By seizing the Iraqi oil fields, the US has effectively become the 3rd largest OPEC member. Did you know that Iraqi oil production just recently came back online? Oil before a conflict resolution or establishment of an effective government. Who do you think is controlling the oil movement into and out of Iraq? The US. The global economy runs on crude oil. From crude oil you get a myriad of derivatives such as gasoline, jet fuel, kerosene, asphalt, paint thinner and a host of other products. Gasoline is actually only ~30% of world oil product output. Oil is absolutely essential (based on current global processes) and its importance cannot be overstated. ANY major disruption to the supply of oil, whether it be a cut in supply or selling oil in a non-dollar currency, threatens all. It's particularly troubling to the US because a) it would threaten the stability of the dollar, as suggested in the paper, and b) it would raise the price of oil in such a way that the US economy would have an extremely hard landing (US and Canada oil CONSUMPTION PER CAPITA is SIX TIMES the global average) and go through a period of recession, possibly depression due to reactionary factors (meaning, if things go wrong, decisionmakers will panic, act emotionally, respond to special interests and make bad decisions in general) The main point I'd like to stress is to read between the lines. Alot of the time "smart" people focus on the details and mistaken THE EFFECT as THE CAUSE. i.e. trying to explain the current global imbalances and their effects by looking at trade activity, exchange rates, and capital flows. These are all events that are reactionary, they occur because of a situation, in this case huge current account deficits and massive national debt. There is no counterargument to the paper because the paper is correct. The historical facts are accurate and his opinions are in line with the events that occured and MAKE SENSE. If you recall, Bush used many arguments to try to convice the public that we needed to invade Iraq, but nothing stuck until he played the WMD card. What did WMD have to do with Iraq? What did 9/11 have to do with Iraq? Nothing, but people are sheep, you can lead them anywhere, even straight into hell (war). The best historical example of misdirection and manipulation on a mass scale stretching over long periods of timeis the continent of Africa. Africa has the world's largest deposits of: 1) Gold 2) Diamond 3) Platinum 4) Titanium 5) Chromium (responsible for producing roughly half of the world's chrome) 6) Vanadium 7) Manganese 8) Palladium 9) Ferrochrome (component of stainless steel) 10) Mohair Along with significant deposits of iron ore, copper, nickel , lead, zinc, and antimony. The forces and machinations that allow the continent to be plundered while its inhabitants struggle is the result of masterfully cunning scheming, collusion on an international scale, and unprecedented greed (let's not turn this into a debate about Africa - start a new thread?). In order to understand the theme and truly appreciate the severity of the imbalance, you need to understand the causes. Ignorance is the root of continued oppression, and by dismissing the arguments the gentleman makes in his paper without giving them proper attention you are choosing ignorance over truth. It's becoming an American habit to accept/fabricate the most convenient truth. The version of the truth that serves the most interests and ruffles the fewest feathers within our own borders. You can almost call it a "democratic truth" because people don't WANT the bad news, they want spin, so they inadvertantly vote for those who always "spin" and never depress the public with harsh truth. The reason I've taken all this time to write all this is because as a trader I'm sure we'd all agree that it's important to be objective and understand things AS THEY ARE, not AS THEY APPEAR TO BE. As someone who intends to be profitable in multiple markets and product classes, I need to UNDERSTAND international economics and how they are affected by the politics of the nations involved. To make the right oil play you need to understand the history of the US in the middle east, what is currently occurring in the middle east, and what the US intends to do in the middle east going forward. I'm not even a trader yet, but from what I've read and the traders I've spoken to, objectivity is key to long-term sustained success. I don't mean a few years, I mean trading successfully in different markets through different periods, ups, downs, shocks, etc.