It is hard to divine the length of this present bubble 2, a true interlinked worldwide
monster bubble.... Of course the Kondratieff cycle says we're due in roughly 70 years from the 1930's. But that cycle allows
for 10 to 15 years on either side... Also, there is no Kondratieff analog for a world economy as large and interlinked and
fast and electronic as the one today... so perhaps the Kondratieff winter will be stretched further into the future by some
In a market economy, if income is dependent on work, and if work is shrinking as the economy
expands from rising productivity, then income cannot possibly increase fast enough to support the consumption needed to eliminate
overcapacity. To avoid the market economy collapsing, ways needs to be found to deliver basic income to the consumer independent
of employment beyond undignified welfare payments.
The outsourcing mania has hit the Pentagon, and China will soon be supplying the ships
for the US Navy. The Pentagon, seeking lowest cost, is pushing defense contractors to outsource offshore for more materials,
components and systems.
The impact of the downward pressure on profits will hit Wal-Mart front and center. About
70% of the company's goods are made in China. By CEO Lee Scott's own admission a couple of months ago at the company's annual
meeting, "Last year it was estimated we imported about $18 billion worth of goods from China."
With the U.S. economy needing $2 billion daily in loans from the central banks of China
and Japan and the White House demanding that Beijing revalue its yuan while proving unable to get the proposed Central American
Free Trade Agreement passed by Congress, it's time for American economists, CEOs and political leaders to fess up.
Much of this bond money is mandated for redemption when the boomer generation retires
and seeks to convert its accumulated savings into consumption, which it will start doing in earnest over the next 5 - 10 years.
Fund managers will increasingly see this coming, and will react by electing to switch from dollar denominated debt in front
of the rush, rather than behind it.
With a view to establish and improve the socialist market economic system in China, enable
the market to fully play its role in resource allocation as well as to put in place and further strengthen the managed floating
exchange rate regime based on market supply and demand, the People’s Bank of China, with authorization of the State Council,
is hereby making the following announcements regarding reforming the RMB exchange rate regime:
General Motors Corp. had a loss of $286 million in the second quarter as a plan that spurred
sales by giving employee discounts to all U.S. buyers in June couldn't offset rising health-care costs and restructuring costs
With the latest burst of credit-backed spending, the US economy is approaching real limits
of just how much it can borrow domestically and internationally. Therefore, further increases in the price of the energy may
not be papered over by more credit, and personal spending on goods and services other than for energy must decline. This change
in spending will directly and quickly impact the US economy.
Why are we suprised that so many companies, and talented people, are fleeing this vampire nation?
These valuable resources are voting with their feet. The best would rather start anew, where they have found a saner society.
The ultimate irony is watching the US compete with Sweden in the race to economic oblivion! We will win the Economic Doomsday
Cup, even if it means destroying ourselves!
"I know for a fact that a number of Chinese companies are considering U.S. acquisitions
right now," Kuhn said. "they include not just multibillion-dollar hostiles, but also smaller (amicable) acquisitions in the
$50 (million) to $200 million range."
While we do not pretend to know whether this is a short-term correction or a general,
long-term trend-reversal, we would certainly refrain from selling GB Pounds against US Dollars, and you would be well advised
to go LONG.
The dollar may have its ups and downs within the long-term trend but we do not believe
that the long-term down-trend of the US-dollar will be reversed quickly.
If an exchange between two parties
is voluntary, it will not take place unless
both believe they will benefit from it. Most
economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.
If you ask me to name the proudest distinction
of Americans, I would choose- because it contains all the others . . . the fact that they were the people who created
the phrase "to make money." No other language or nation had ever used these words before; men had always thought of
wealth as a static quantity . . . to be seized, begged, inherited, shared, looted or obtained as a favor. Americans were
the first to understand that wealth has to be created.