bkalahas

Roubini: Commodities Due for a Correction

Mark,
There is a difference between the will/policy to grow and the capacity for growth. What you have been refering to is the capacity for growth in China followed by India. Probably China has better economic policies than India but neither country can grow at a GDP growth rate more than 6-8%, primarily due to state-sponsored growth limits.
Ramanathan

On Nov 06 07:06 PM Mark Anthony wrote:

> It was a horrible horrible mistake that merely because he wears a
> black square hat, Dr. Nouriel Roubini should be invited to a commodities
> conference and sit next to respected commodities investment gurus
> like Jim Rogers, who actually travels around the world and knows
> what's going on.
>
> 1. Roubini obvious does NOT know any commodity at all. He does not
> know supply/demand of any of the commodities. He doesn't know any
> of the numbers of supply and demand of anything.
>
> 2. Even worse, Roubini feels he is entitled utter nonsenses on commodities
> supply/demand, without knowing any number, just because he was invited
> so he thought was qualified to talk. The professor should simply
> acknowledge he does not know the numbers or the fundamentals, when
> he does not know then.
>
> 3. Even worse than talking about something he doesn't know, Roubini
> doesn't even seem to be able to use logic. He was basically telling
> us that the combined economic scale of India and China, with a combined
> population almost 8 times that of the USA, consumes less than 1/6
> of the USA total, so therefore it is IMPOSSIBLE for China and India's
> economy to grow further.
>
> Well DAH, professor! Exactly because China and India's per capital
> consumption is only at 1/48th of the per capital level of the USA,
> there is a GIGANTIC GIGANTIC ROOM for the economy of both country
> to grow. The economic scale of Chindia could easily grow to $80 trillion,
> and America's $16 trillion economy will be reduced by 75%, in real
> purchase power term.
>
> The only limit to growth is this planet simply do not have enough
> natural resource to allow both countries to develope to the consumption
> level any where near America's current consumption level. That's
> an unbreakable physical limit.
>
> All it says is there will be a huge bull market for commidities and
> a bear market for the fiat currencies.
> seekingalpha.com/autho...
>
> Roubini must learn to say "I don't know" when he does not know.

BofA Following Citigroup to $5 or Lower

'aarc',
This is socio-economic analysis and errors seem to have come into your writing.
(A) Agriculture: Per-hectare yield in China and India and other East/South/West/South East Asian/African/South/Ce... American countries. These are the demographically increasing areas but their agricultural output is barely enough to meet internal demand.
(B) Manufacturing: Mechanical and electro-mechanical and automotive technologies as well as chemical industries have started big time in the above areas in the last 30-40 years but is there next-generation research in these areas in those countries? The answer is NO. USA still produces a lot of R&D in those areas and it is not easy to match the US output. So technologies have to come out of US and be exported to the above areas.
(C) High Technology: Steve Jobs is not the last of the baby-boomer tech heroes. Just look at Google and Facebook and the telecom startups in Silicon Valley.
(D) Energy Technology: This will come out sooner out of US R&D than China R&D.
(E) Healthcare: Automated and efficient healthcare is a possibility sooner in US than in other countries even with the higher costs.
(F) Military exports: Nothing need to be written here since DOD funds forever all new military technologies.

Which sector would you think will get more innovation inorder to support all of the above technologies? That would be financial sector aka financial engineering. Cannot live without it, can we?

If legal immigration continues into US the way it had, then US will lead in R&D, money making and technology exports.

The banking sector death will lead to an innovative revival. The banking official may be corrupt but the level of corruption does not match that of Asia or Africa or South America. It is far far lesser.

BK




On Jan 15 01:19 PM aarc wrote:

> Keep bashing the banks.
>
> What will be the future of the US of A without the banking and finance
> sectors?
>
> -
-
> - Agriculture? = definitely not. Whatever agricultural technology
America
> has, the developing coutries have already learned them all with
cheap
> abundant labor to boot.
>
> - - - Industrialization/Manu... =
nope!
> America will have to either reduce minimum salary by 90% which
nobody
> can possibly live with or slap 90% tariff on imported items
coming
> from China. The glory days of American industrial might is
already
> done for the USA and gone to the developing countries.
>
> -
-
> - Technology? = perhaps. But with the American baby boomers who used
to
> be so excited with technology during the last few decades
approaching
> old age, it is only natural that they will lose their
interest
> in technology. Steven Jobs might just be the last of them and
he
> is not going to last for long. The X-generation who suffered too
much
> from parental divorces during their childhood would want no part
of
> what their parents love to do which is tinkering with tech toys.
> The
Y-generation
> which is going to be the future of America are much too
green
> minded and are too pampered with promises of $150,000 annual
salaries
> of banking and finance employees they decided to take take
vocation
> and shuned engineering at all costs. Meanwhile, China and
India
> made technology and engineering as the main course for the future
of
> their hundreds of millions of young students.
>
> - - -
Alternative
> Energy? = perhaps. AE is not a proprietary technology the
US
> posseses. China also has massive investments in AE since energy cost
in
> that country is exorbitantly expensive as compared to the US with
their
> meager income paying the same price for the same barrel of oil.
They
> are much much more desperate to invent and produce viable
alternative
> energy sources than the Americans. And with their hundreds
of
> millions of new engineers, they are more likely to be able to
develop
> AE much faster than the US. Sooner of later, the US will have
to
> import AE technology from China rather than the other way around.
>
>
> -
-
> - Health Care? = Definitely. But it is more for the future rather
than
> the present. American baby boomers are still in their 50's and
60's
> and are still healthy. 10, 20 and 30 years from now, health care
will
> become the major source of internal income for the USA. And once
the
> 2.8 billion young baby boomers of the BRIC which are now in their
20's,
> 30's and 40's approaches old age; then the US can start exporting
more
> and more health care technology to those countries. But that will
be
> at least 20 years from now.
>
> - - - Military hardware and
software?
> = definitely. The United States of America is the numero uno
in
> military. Every developing country with diplomatic ties with the
> US
will
> be buying more and more from the US for their defence needs. Flip
side
> is that the US still spends more money into national defence than
the
> whole world combined. Likewise, being the premier merchant of death
is
> not really worth mentioning too often to the whole world at large.
This
> is not something you can rally the whole population of the country
towards
> more productivity and income generation in order to be able to
meet
> the increasing demands of an aging population for more health care.
>
>
> -
-
> - Retail and consumer goods? = McDo, Coke, etc. Sure, they will
dominate
> the whole world in retail in the foreseable future. But not
enough.
> Retail is a dog eats dog industry. China is already starting to
dominate
> global exports for consumer goods including foodstuffs.
>
> USA
is
> in a bind. It has been tinkering with new ways and means of how to
generate
> more income from banking and finance for the last 2 decades
while
> neglecting manufacturing and technology.
>
> And the result?
Record
> profits were achieved by the the banks and financial
institutions
> from 2001 to 2006. The downside was that their newly
invented
> MBSs and ABSs toxic bombs exploded right into their faces and
damaging
> not only the US but the whole world at large.
>
> All is not lost. Most experimentation don't result with eureka the
> first time.
>
> There is alway a second time around.
>
> Hope
they
> do it right the next time otherwise the US will become an
undeveloped
> or even a third world country within the next few decades.

The Manipulation of Gold Prices

Gold price relative to Dow is still high. I would expect the Dow to appreciate as the dollar devalues when asset delation followed by re-inflation starts. It does not seem that asset re-inflation is ready to happen. Asset deflation is well on its way with all real estate, corporate revenues and so equities, bonds being on the downtrend trend for a while.
Until and unless Gold to Dow reaches 1 or lesser, all assets are inflated. That would be the inflexion point. But Gold price per ounce will not reach $2000. I would think the equilibrium price considering all selling by Central Banks (which outweighs retail buying) and Hedge funds would be $1500.

My prediction is we will see $1250 per ounce when Dollar falls to 1.5 per Euro. Now Dollar is 1.3 to Euro. It should oscillate between $1100 and $1500 with a mean around $1250 from May 2009 till Dec 2009.