On Apr 22, 12:07=A0pm, Jerry Kraus <jkraus_1...@[EMAIL PROTECTED]
> wrote:
> On Apr 22, 12:51=A0pm, solon fox <solon...@[EMAIL PROTECTED]
> wrote:
>
>
>
>
>
> > On Apr 22, 7:00=A0am, Michae...@[EMAIL PROTECTED]
wrote:
>
> > > On Apr 21, 1:07 pm, Jerry Kraus <jkraus_1...@[EMAIL PROTECTED]
> wrote:
>
> > > > On Apr 21, 12:59 pm, Michae...@[EMAIL PROTECTED]
wrote:
>
> > > > > On Apr 16, 12:01 pm, Jerry Kraus <jkraus_1...@[EMAIL PROTECTED]
> wrote:
>
> > > > > > On Apr 16, 10:30 am, ZerkonX <Z...@[EMAIL PROTECTED]
> wrote:
>
> > > > > > > On Tue, 15 Apr 2008 08:27:34 -0700, Jerry Kraus wrote:
> > > > > > > > The patterns are strikingly parallel from the beginning of
t=
he century
> > > > > > > > up to the 1970s.
>
> > > > > > > Gold Standard go bye-bye. Money becomes separated from a
refer=
enced value
> > > > > > > standard to a value determined by control and manipulation.
>
> > > > > > > The rest, as they say, is history.
>
> > > > > > It's curious how people in the U.S. say we're not in a "Bear
Mar=
ket",
> > > > > > when the value of the U.S. currency has dropped by 50% in the
la=
st
> > > > > > five years on international money markets, and the Stock
Market =
is
> > > > > > just about at the same level it was five years ago. =A0That's
a =
50% drop
> > > > > > in effective market capitalization. =A0Not counting inflation.
>
> > > > > American (who are not involved in currency exchange hysteria) do
n=
ot
> > > > > measure their wealth based off of the Euro.
>
> > > > > The measure it based off of what in can buy for them. =A0There
has=
not
> > > > > been a 50% drop in purchasing power.- Hide quoted text -
>
> > > > > - Show quoted text -
>
> > > > There has been a 50% drop in purchasing power of the dollar on
> > > > international markets as compared to the Euro. =A0If you are
purchas=
ing
> > > > only American products in the United States, the drop in
purchasing
> > > > power is not as noticeable. =A0As long as you limit yourself to
> > > > purchasing American products in the U.S.
>
> > > Once again a false argument. =A0Most Americans have not seen a 50%
> > > increase in the cost of the majority of the goods and services they
> > > consume.
>
> > > While 5-10% of the average families budget has seen a large price
> > > increase, most of the budget has seen only a modest increase in
cost.
>
> > > The falling value of the dollar is a much bigger problem for those
> > > im****ting goods into the US then it is for the consumer. =A0And it
act=
s
> > > as a stimulus for American business. =A0 It is an issue, but it is
not=
> > > our biggest issue.- Hide quoted text -
>
> > > - Show quoted text -
>
> > I agree with the general content of your comments. The weakened dollar
> > is good for American ex****ts and it is good for tourists visiting the
> > US.
>
> > Let's not lose sight of the fact that the weakened dollar contributes
> > to higher prices at the gas pump. Oil is trading at over $117 per
> > barrel; but 117 dollars is 73.17 euros (1.00 Euro =3D 1.60 U.S.
> > Dollars). The low value of the dollar is of economic concern. If the
> > dollar and euro were evenly matched at 1 to 1, the price of gas at the
> > pump would be $2.50 (4 US Dollars =3D 2.50 Euros). Granted, that is a
> > bit overstated, because there would be other impacts of a strengthened
> > dollar, but the point is that the weakened dollar is having a
> > significant impact of $1 or more per gallon of gas.
>
> > High gas prices mean higher prices in the supermarket and tighter
> > budgets for American consumers. The weakened dollar is having a big
> > impact on our economy even if it isn't our "biggest" issue.
>
> > The EU is on the cusp of their own housing market correction and
> > credit crisis. Soon, the euro will weaken and the dollar will
> > strengthen as our own economy begins to recover.
>
> > -solon fox- Hide quoted text -
>
> > - Show quoted text -
>
> In order to make up for the massive decapitalization from the fall in
> the U.S. dollar, the DOW would have to get to 30,000 or so in the next
> few weeks in order for the economy to recover later this year. =A0Ain't
> agonna happen. =A0I mean for it to grow significantly. =A0We might have
> zero growth or 1 percent growth from time to time.
>
You believe that the DJI would have to more than double in order to
signify an upcoming recovery? Nonsense! Stocks were moderately
overvalued prior to the subprime mortgage crisis. The dollar has been
extraordinarily devalued. All the is required for a slow recovery (we
don't want a fast inflationary recovery) is for the dollar to
strengthen and for the DJI to trend upwards from 12,200 where it was
trading in spring of '07. The DJI is already trending upward from a
low of 11,508 in March '08 to > 12,700 today.
Long term bonds are holding flat at the moment indicating that
investors are beginning to predict the end of interest rate cuts. The
bond yield curve points smoothly upwards with 20 yr and 30 yr bonds
trading even. This indicates a slow desired recovery.
> There is no massive housing crisis in Europe. =A0Just in some areas too
> closely tied to the U.S. market, like Switzerland, Ireland, Spain.
> Not Britain, France or Germany. =A0Their economic growth will be slowed
> by the problems in the U.S., but their currency will remain stable.
> Because socialism works better than capitalism. =A0As you are currently
> observing.- Hide quoted text -
>
> - Show quoted text -
You are correct about the uneven housing market in the EU (and I am
glad that you recognized the declines which I referenced). The ECB is
in a tough spot wanting to lower interest rates in order to relieve
the credit crunch. The Bank of England announced a bailout program
yesterday due to the tightened credit market. But, the ECB faces
stagflation with wage inflation in Germany and France also suffering
from consumer product inflation. It's a bit touch and go. The ECB
would like to lower interest rates, freeing up credit (and weakening
the Euro, which they believe to be too strong) and at the same time
they are worried about inflation the same as the Fed.
Nonetheless, credit is tight and depreciation in real estate will
spread if the ECB doesn't act to lower rates. Pressure is mounting as
most european analysts are looking for lower rates.
Things were simpler before globalization. It isn't just the ties to
the US, it is the banking problem that has created a EU credit crunch.
Ultimately, the ECB will act to protect their economy, which means
lowering interest rates, releasing credit, stimulating economic growth
(and suffering inflation). All of which will help to strengthen the US
dollar, enable the Fed to begin raising rates to fight inflation and
so on.
Lather, rinse, repeat.
I see nothing remarkable or distingui****ng about the current economic
crisis and past recessions. Hence, the pattern will be replayed.
One of the primary reasons that recessions aren't endless downward
spirals is because people are simply motivated to work and improve
their own standing. People are always trying to do better and more
often than not, their efforts give results.
Bears are always bearish in a bear market and bulls are always bullish
in a bull market.
-solon fox
BTW My dreams never become nightmares. Dreams are just dreams.
Nightmares are what happens in real life.
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