Think-About-It

How Will the U.S. Recover from the Debt Crisis?

Nice opening chart!

Don't forget that when Japan's real estate and stock market bubble burst they had two things going for them that we (the U.S.) currently lack. 1) They were the worlds largest creditor nation whereas we are the worlds largest debtor nation. 2) During the years following the POP global GDP was expanding at a healthy clip so they were able to sell many goods to their major trading partners whereas that is not a given for the U.S. over the next 5+ years. These two factors helped them "manage" their unemployment rate and dissipate social unrest.

Commodity based assets are not the only hedge against the debasement of our currency. Foreign currencies, foreign stocks, precious metals and shorting bonds can also work.

Why This Isn't Your Daddy's Recession

Many thanks to "snagglesnarf" for hitting the nail on the head!!! As the old saying goes... Don't just do something, stand there.

Unfortunately for the U.S. and most other countries government leaders the world over have used Keynes bogus theories to justify their interventions and power grabs. Even going as far as convincing the majority of people that inflation is good and deflation is bad -- if they can pull that trick off than the other deceptions are a piece of cake.

Global Growth Trends: Asia and Brazil

China's tie to the dollar does not limit their growth at all.

Is the Fed Really Printing Money?

"Inflation redistributes wealth from the rich and the “fat cat” bankers to people living paycheck to paycheck and to debtors."

This line killed your credibility and I was going to get into it but "Smarty Pants" stated it admirably.

As Bill Fleckenstein says "In a social democracy with a fiat currency all roads lead to inflation."

Investing for deflation or low inflation is a high risk strategy with limited upside if you are right and a ton of downside if you are wrong...

When Will Deflation Turn Into Inflation? (And How Quickly?)

Deflation is friend, not foe. What is that saying about every man being a product of his times? Anyway, although most of us (especially on Seeking Alpha) view ourselves as independent thinkers most of us have been conditioned to accept modest inflation as good or even ideal and deflation as bad.

Our Keynesian economist and political leaders have hammered this message home for so long that we have come to accept it either intellectually or subconsciously. I cringe every time I read/hear someone say that deflation must be avoided as it hurts our economy or say that deflation was one of the "causes" or "problems" of the great depression.

Please read up on your Austrian Economics to fully grasp how falling prices are the by-product of a healthy, growing vibrant economy when the currency is not debased. I'm not talking about price collapses that occur when asset bubbles burst as we are experiencing in housing. That is not deflation of the general price level brought on by higher productivity, it is just the correction of a speculative bubble-price.

Once you understand and accept deflation as a good and desirable outcome of human achievement over time (think about how much more efficient we are in almost every area of life) I believe you will see higher prices for what they really are -- the result of government interference and manipulation and a back-door tax on the working class. And see central bankers, treasurers and politically connected financial institutions for what they are -- the primary beneficiaries of inflationary policies.

Our founding fathers (having just experienced the ravages of inflation and understanding the source) feared giving future politicians the ability to debase our currency and therefore stipulated in our constitution that only gold and silver could be money/legal tender. They knew what they were doing. Their thinking is not out-dated in today's high-tech global world, in fact, it is prescient.

Pondering Cramer's Call to Issue More U.S. Debt

Many wise investors (such as Jim Rogers) state that U.S. treasuries are an over-priced asset yet they are waiting to short them. Perhaps Rogers is waiting for them to approach "bubble-status" as he claims to have acted to early on his ideas in the past because he looks further out than the masses.

I say start building your "short-Treasury" position now and increase it over time and on dips because it is impossible to know then the spike in rates will come or for that matter whether the increase will occur gradually. History favors the former as bubbles typically burst rather than gradually deflate.

Trade Wars: Understanding Complicated U.S. / China Relations

The U.S. does not have a: "symbiotic relationship with China."

It's a vendor finance situation where the borrower (U.S.) is given an unlimited line of credit and predictably abuses it ultimately borrowing beyond capacity to repay except by means of a highly depreciated currency. U.S. citizens lose as their purchasing power declines and job opportunities vanish and the U.S. government loses as it's credit-worthliness and influence wanes.

Chinas' benefits are straight forward. Yes, they will have to take a hair cut on their dollar denominated assets but that's digestable. In the mean time they are progressing through their industrial revolution, building and buying capabilities and raising their standard of living.

Symbiotic relationships must be mutually beneficial to a significant degree. Owning more depreciating goods made in China is a diminimus benifit for the U.S.

Lone Pine Capital's Melco Crown Stake: Betting on a Lower Macau Gaming Revenue Tax?

Thanks for sharing your insightful thinking on MPEL

Housing: Strong Recovery Ahead

Are you serious?

"Housing will rise quite sharply, even accelerating over the next year or two..."

For this guessing game I would use history as my guide. The history of bubbles popping suggest that they do no reflate "quite sharply." Occationally there is a dead cat bounce but that's all it is. I would look to a different asset class than the one that just imploded when searching for the next wave of accelerating growth.

True Unemployment Numbers

I'm curious about "private sector unemployment/productio...

I've read that total government expenditures now equal roughly 47% - 48% of U.S. GDP up handsomely from around 8% in 1900. Much of this expenditure must be for direct government (local, state & Fed) payrolls which ultimately is paid for by the private sector through taxation or inflation.

During this recession/depression it seams as though government workers are fairing much better on average at maintaining their jobs, hours, pay rates and retirement benefits than private sector workers. Would you care to guess or shed some light as to possibility of reporting unemployment related numbers on each group separately? Or something along these lines?

China as an Investment Destination

I've been a bull on China for a decade but since reading "Capitalism with Chinese Characteristics" I've become much more cautious on China's long-term growth prospects? I own MPEL and HOGS but sold my Matthews China Fund a while ago.

My take away was that many of China's "opening-up" reform policies of the 80s [which provided much more diverse bottoms-up, entrepreneurial growth than the 90s growth which was more narrow and characterized by government directed big projects] have been repealed or are in the process of being made less affective as the Government reasserts its attempt to manage and plan their economy.

Any views on the message of this book or theme would be appreciated.

Another Stimulus Bill?

"As we've said before, inflation is a much better choice than risking depression."

So many intelligent people have been brain washed (by studying bogus keynsian theories) into thinking that inflation is good that it has become "common knowledge." If you fall into the camp of "inflation good, deflation bad" please do yourself a huge favor and read up on Austrian Economics.

Inflation is only good for a select few groups that have significant assets relative to their earnings and who invest heavily in inflation themes plus those who receive the new money before it filters through the economic system (eg., bankers). Everyone else suffers from inflation. Everyone!!

Inflation: As Inevitable as Death and Taxes

If you desire a rising standard of living for as many people as possible then deflation through the free market process (not money/credit manipulation/contraction) is what you want. If you desire a rising standard of living for a few select groups then inflation via money/credit expansion is what you should wish for.

Is Gold a Hedge on Uncertain Dollar Outlook?

Hot Richard,
You have a way with words! LOL

Home Prices in 2014? Early MacroShares Trading Says Dead Flat from Here

Are you factoring in the annual expenses of the ETP? They run a minimum of 1.25% per year for 5 years = 6.25% that must be covered to just break even. Plus the expenses may be higher than that...

Also, there is the time value of money. You need to discount expented money that is 5 years out back to today.

Nobody that bought DMM today at 31 is expecting to get 31 dollars returned to them five years from now. Add the risks of this new product and definite carring costs and the built-in expected decline must be more than you suggest.