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Are the current signs from deficits, overspending, and etc gonna to see USA ending up like Nikkei where it still havent recovered from its high of 40,000 Oct 1990. Now it is at about 8,000!!!
Of course it is vague because market are heading towards uncertain times especially when the politicians are unable to admit that it is a problem and not offering any real finiancial fixes. Or they do is trying to implement programs to stimulate voters, nor the economy.
And if they are doing that, I have to agree that Dow might be be down for a long time to recover.
Therefore, my generalisation is to see market pick up and perform instead of following Japan pattern of staying down for a long long time.
Are the current signs from deficits, overspending, and etc gonna to see USA ending up like Nikkei where it still havent recovered from its high of 40,000 Oct 1990. Now it is at about 8,000!!!
My bet is that we are going to see the Dow at about 12k but the worth of it will be around 1,000 to 500 in 1999 dollars. It is the nature of bubbles to pop to a lower level than they started at.
Of course it is vague because market are heading towards uncertain times especially when the politicians are unable to admit that it is a problem and not offering any real finiancial fixes. Or they do is trying to implement programs to stimulate voters, nor the economy.
And if they are doing that, I have to agree that Dow might be be down for a long time to recover.
Therefore, my generalisation is to see market pick up and perform instead of following Japan pattern of staying down for a long long time.
What has deriven the Japanies market lower is their popping real estate bubble. After 21 years they haven't hit bottom yet. In short if you want the market to pick up then you need higher wages to support higher house prices. What you have with falling house prices is deflation, with deflation comes falling wages it is a vicious downwards spiral that is really hard to stop after it starts. This is why I want a 4X on the minimum wage. It will wipe out enough debt so that we can get economic growth sooner rather than later.
US stocks are making too much money to crash. Only way a big fall comes now is if world's banking system becomes completely illiquid. Not likely, but not impossible. Otherwise for an utter collapse in stock prices deflationary spiral would have to take hold to start wiping out corporate earning with no end in sight. That did happen in Japan, but I think much of that came from being a closed economy where inflation and investment is very hard to import relative to an economy like the US.
What has deriven the Japanies market lower is their popping real estate bubble. After 21 years they haven't hit bottom yet. In short if you want the market to pick up then you need higher wages to support higher house prices. What you have with falling house prices is deflation, with deflation comes falling wages it is a vicious downwards spiral that is really hard to stop after it starts. This is why I want a 4X on the minimum wage. It will wipe out enough debt so that we can get economic growth sooner rather than later.
Isnt US suffering from the identical effects from the real estate bubble due to the sub prime crisis? Now coupled with unemployment and deficits problems, the question remains would it end up like Japan?
And one interesting factor I noticed is that at least Japan did not spend and adding up the deficits like US spending from Star Wars to Iraq Wars since 90's.
Isnt US suffering from the identical effects from the real estate bubble due to the sub prime crisis? Now coupled with unemployment and deficits problems, the question remains would it end up like Japan?
And one interesting factor I noticed is that at least Japan did not spend and adding up the deficits like US spending from Star Wars to Iraq Wars since 90's.
Japan is at 200% of GDP in government debt. They have a much higher savings rate than we do or had it. The prices of real estate have dropped faster here than they are still doing in Japan but the underlying problems with real estate are similar. We are going to lose way more in value than they did because our economy is structurally in worse shape than theirs is. But we could very well see a protracted falling house price and wage deflation like they are but we will more likely have some kind of crisis that drives things to a head sooner than they haven't yet. We are more likely to end up in hyper inflation than they are. Our debt is valued in dollars theirs isn't valued in yen. We can print our debt down they can't as easily. There are several ways this can end and most aren't that pretty. The 4X on the minimum wage that I've talked about is ugly but I think it is still the best way to go. Generally speaking if you have a problem and you chose to do something about it you get a better result than if you wait for things to resolve themselves.
US stocks are making too much money to crash. Only way a big fall comes now is if world's banking system becomes completely illiquid. Not likely, but not impossible. Otherwise for an utter collapse in stock prices deflationary spiral would have to take hold to start wiping out corporate earning with no end in sight. That did happen in Japan, but I think much of that came from being a closed economy where inflation and investment is very hard to import relative to an economy like the US.
How much of the current corporate profits come from the carry trade?
"Unless Europe, Japan, and USA can also face up to responsibilities they will drag down not only themselves but the global economy," World Bank President Robert Zoellick said in a speech at George Washington University.
"They have procrastinated for too long on taking the difficult decisions, narrowing what choices are now left to a painful few," he said, according to a prepared text of his remarks, which come ahead of meetings of the World Bank and International Monetary Fund next week.
How many elected polticians really adhere to the gold standard concept - " Government of the people, by the people, for thepeople, shall not perish from the earth." Instead, they tend to print more notes as monies rather to face responsibilites.
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