Hello Hugh, << Those of us with non-USD cash and gold keep waiting for the crash in the USD>> Currencies? Hold a bit of each, and shuffle as they grind against each other. I suspect that the big picture frame has been constructed already and we can see its outlines very clearly. What remains to be spotlighted is the picture itself, with all its gory details. I suspect that:
(a) The US will still, due to its debt powered locomotive role, remain the consumption capital of the world, and forced to remain there until its balance sheet is totally ruined and its boomer retirement completely cancelled by the fact that all the world will competitively devalue against the USD and cycle back the trade dollars with gusto, buying assets and liabilities, collecting returns off the backs of retirees wannabies working 60 hour weeks;
(b) The US will export soldiers to keep the peace until overwhelming exhaustion;
(c) Japan will continue to bleed productive capital and passive wealth, supported by old folks’ bank accounts and domestic companies looking for a globalization edge, via outward bound foreign direct investment, depreciation, devaluation, and portfolio flight;
(d) China will continue to aggregate capital, invest in infrastructure, do structural reform, and build factories, until all productively employed at better than current domestic pay rate but lower than international compensation scale;
(e) Arabia will continue to export oil, until conflagration, technological obsolescence, or exhaustion;
(f) Russia will continue to act as a counter-balancing stick in a uni-polar world, either recover fully or break up completely;
(g) Europe will continue to enjoy its 35 hour work week, olive groves, ski chalets, out door cafes, and immigrant cheap labour, supported by a world printing plenty of cash, thus allowing socialism to thrive;
(h) Latin America will continue to live from financial crisis to political emergencies, supported by occasional capital injection by global banks;
(i) Africa? Simply not clear; and
(j) Australia/Canada will continue to dig and live off the bounty that nature provided.
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=16063901 July 12th, 2001 “Japan devaluation from these levels will probably trigger a general round of competitive devaluation across Asia, putting additional burden on the USD, US trade flow, consumer, etc.”
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=16158355 August 1st, 2001 “<<In fact a lot of companies just had a really good year>> and many more a merrier decade. The financial environment is now substantially different, savings are much lower, savings rate will have to turn positive, people are closer in time in need of both; net worth is decreasing; debt will cause more unemployment; we may soon be hit by either deflation or inflation, or worse, both, garnished with recession, spiced with unemployment for high earners, or reduced income for high earners; all inward capital flow to the US are mostly in the form of hot money, and are at high meter readings; end-user aggregate demand have fallen sharply, and any recovery may at most be tepid; and the world ex-USA is sinking in a synchronized and bubble energized fashion, gurgling in capacity, choking on germs of competitive devaluation and protectionism.”
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=16222275 August 16th, 2001 “I believe that the USD, once fallen, will then be matched by a round of competitive devaluation engineered by policy makers around the world to inflate away their own respective problems and fight off deflation, and the spiral then continues. ”
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