You guys can call all the names you want. Answer this question. How long can this country afford to import 2.6 billion dollars of goods per day. That is 2.6 billion of our wealth leaving the country each day. Roach did not make that number up. Think about that. The ability to control inflation once it takes hold becomes more and more difficult. This time, with 35 to 40 trillion in long term obligations it may be time to consider at least a position of protection. I do not believe it will reach 1929 proportions, but it will exceed the 1987 downturn. I do not care to have 1/2 of my savings and retirement be diluted by the erosive effects of inflation. I will never convince those of you who summarily dismiss those prognostications as nothing, but for those of you who have not shut the door, please try to reason this thing out for yourselves. Do not take my word for it. Look at it logically. Above all protect yourselves from this wave of debt that is rolling over on all of us.
The idea of debt is an interesting thing. It's like the old saying, if you owe a bank $10,000 they own you. If you owe a bank $10,000,000, then you own it.
If (and I'm only saying "if") the economy crashed like a Pinto, then it would be the banks and mortgage companies that would take the real hit. Consumers would get walloped for sure, but the financial institutions would suffer badly indeed.
I agree with you to the extent one has to factor in all realities to make any kind of judgment. How is it that you intend to protect yourself?
Don't bother, they won't listen. They won't believe it until it happens.
We've been doing it for a while and our economy is still growing faster than any other on Earth. I think we can do it as long as they have the goods and we have the dough.
"But, but, but..." you say "all that wealth leaving the country!" Well, answer me these questions: If we buy their stuff in dollars, what do they do with our money? Do they buy other currencies? Do they buy other goods? Where does the US Buck end up? Whose pocket? Sooner or later the dollar needs to be repatriated. What does that mean and where does it happen?
As long as the other countries of the world are willing to accept something less than the present value of a current dollars worth. We are the only game in town, and a devalued piece of something in the future is way better than all of nothing down the road. Why do you think the Chinese peg their currency to the dollar. They have to. No Asian country wants to have a stronger currency than it's neighbors in regards to the dollar because it immediately gives the other Asian countries a huge advantage in exporting goods to the US. Why do you think the Administration has been talking down the dollar so much? Because it's inflationary, and you can bet your bottom dollar that the Fed is way more worried about deflation than inflation even if they won't say it. Don't be surprised to see interest falling in late 2005. It's a prediction, and it's about as on target as Roach's at this point. I'm not saying Roach isn't correct regarding this situation stretching out into infinitum, but things change quickly in a global economy, and the best minds in the world really have no idea where we will be in 5 years.