Posts by "evanrowe"

Pipped..where do you get this stuff from?

Where does Ashraf stand on Cable?

Ash, you mean 1070 not 1170 right?

Asad, don't you think fundamentals also has a herd effect? I think so many in the business and investment classes transmit their information from the business papers and channels, that the same explanations occur--feeding a herd cycle. A classic one is "gold is going up because of fears of inflation". I really doubt that there will be inflation, but if you get enough people to jump on board, who cares what the official rationale is? What about the old dutch tulip boom? Or our last housing boom (housing has never gone down! was the rallying cry). I agree that having a fundamental understanding will probably give somebody the heads up or the edge, but I also think that many of the official fundamentals narratives misses whatever key components it needs to miss in order for there to be a collapse.

My fundamentals story is that there is a shrinking amount of space for private investment, at least the type of investment that can create massive employment. If this triggers enough social backlash, then all bets are off. You have periods of business dominance in history. But you have periods of major statism (the last great depression being a case in point) where the state has distinct advantages at answering where the private sector has difficulty answering.

Xaron, all the death to the dollar models are built on future growth and investing and lending. All of the outstanding debt can be wiped out in the fashion that debt is wiped out. It isn't the same as borrowing for individuals. The U.S. can borrow and invest in the same way the Japanese did in the 90s. Japan borrowed a higher percentage of GDP than the U.S. has--yet it still remained in deflation (and for whatever reason, still remain aligned with the U.S... crucial decisions to come for the future of Japan when it comes to potential alignments eastward with big china) So the whole notion that the U.S. is in debt that, that it is "printing money" is silly. They are creating the incentive to BORROW money for the top 2% of our economy, but they aren't printing it for the rest of us. That means the money only exists on paper. And one day the paper is worth X, but the next week it could be worth Y. I owe 50 grand on student loans, and if I were to pay it back, it would be in circulation. If I default, the money just vanishes, and the value of the lender decreases. if everyone does this, as is happening all over the place with houses, and it spreads to other assets, then it will destroy the imaginary dollars, making the real dollars seem more scarce. Only the drug dealers can debase the dollar then!