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  1. #91
    Dreaming the life onemoretime's Avatar
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    Quote Originally Posted by MoneyTick View Post
    That old debt ceiling jabber sickens me. Come on - they've already raised it eleven times in the past decade! Let them keep raising it another twenty until they look like ridiculous fools. They were having the same debate in 1979; that same fiery and controversial bulshiteering from the congressional theater of real-world drama is in re-play session. It doesn't mean a thing.

    The US Government has breached the 100% debt-GDP level, our deficit is worse than Greece (however, it bears less weight since we can yield higher growth), and it will take a decade or more just to pay the interest on our debt.

    We're still treading water only because of our world currency prerogative.

    However, the low-profile transaction Bill Gross initiated to short sell treasuries means a double dip is on the horizon. Thank goodness for short-selling! I can't wait to make some money off the harvest of barren regrets these fools in congress are cultivating. Another round of Zimbabwe style QE3 chemotherapy from Doctor Bernanke, and commodity prices will be on a rocket to space.
    Where exactly are you seeing this demand, anyway?

  2. #92
    Dreaming the life onemoretime's Avatar
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    Quote Originally Posted by MoneyTick View Post
    That old debt ceiling jabber sickens me. Come on - they've already raised it eleven times in the past decade! Let them keep raising it another twenty until they look like ridiculous fools. They were having the same debate in 1979; that same fiery and controversial bulshiteering from the congressional theater of real-world drama is in re-play session. It doesn't mean a thing.

    The US Government has breached the 100% debt-GDP level, our deficit is worse than Greece (however, it bears less weight since we can yield higher growth), and it will take a decade or more just to pay the interest on our debt.

    We're still treading water only because of our world currency prerogative.

    However, the low-profile transaction Bill Gross initiated to short sell treasuries means a double dip is on the horizon. Thank goodness for short-selling! I can't wait to make some money off the harvest of barren regrets these fools in congress are cultivating. Another round of Zimbabwe style QE3 chemotherapy from Doctor Bernanke, and commodity prices will be on a rocket to space.
    Where exactly are you seeing this demand, anyway?

  3. #93
    Senior Member MoneyTick's Avatar
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    Quote Originally Posted by onemoretime View Post
    Where exactly are you seeing this demand, anyway?
    The demand as a catalyst for higher commodity prices?

    1) The BRIC emerging markets, most notably China and India. I generally exclude Brazil from the global commodity demand curve since they're pretty much self-sustainable and not a major supply contributor. In terms of energy/oil: about 50%-60% of their vehicles use CNG systems in lieu of oil based fuels. Those that do utilize domestically produced bio-fuels. However, China and India are consuming at an extremely accelerated rate.

    2) And of course - rumors of QE3. Take a look at the correlations between QE announcements and the spikes in commodity prices:




    COMMODITY FUTURES (spot price):


    In the absence of demand, any quantitative easing gets the job done.
    got chaos?

  4. #94
    Dreaming the life onemoretime's Avatar
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    Quote Originally Posted by MoneyTick View Post
    The demand as a catalyst for higher commodity prices?

    1) The BRIC emerging markets, most notably China and India. I generally exclude Brazil from the global commodity demand curve since they're pretty much self-sustainable and not a major supply contributor. In terms of energy/oil: about 50%-60% of their vehicles use CNG systems in lieu of oil based fuels. Those that do utilize domestically produced bio-fuels. However, China and India are consuming at an extremely accelerated rate.
    China's also extremely overbuilt, and only staying afloat because of massive government interference, combined with currency manipulation. That's not going to last forever, especially since multinationals are beginning to ditch China for countries with even lower labor costs. India may be a different story, but it's my belief that population growth is far too rapid to seriously raise standards of living enough to raise demand beyond subsistence goods and cheap electronics. There just aren't enough container ships.

    2) And of course - rumors of QE3. Take a look at the correlations between QE announcements and the spikes in commodity prices:




    COMMODITY FUTURES (spot price):


    In the absence of demand, any quantitative easing gets the job done.
    QE mainly benefits the institutional traders, who benefit from the reduction of risk that the injection of cash brings to their positions. None of those rises are anything close to permanent - barring any investment in productive capital, those are nothing but bubbles that will pop as soon as the cash works its way down to the black hole that is private debt.

  5. #95
    Senior Member MoneyTick's Avatar
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    China's also extremely overbuilt, and only staying afloat because of massive government interference, combined with currency manipulation. That's not going to last forever, especially since multinationals are beginning to ditch China for countries with even lower labor costs. India may be a different story, but it's my belief that population growth is far too rapid to seriously raise standards of living enough to raise demand beyond subsistence goods and cheap electronics. There just aren't enough container ships.
    Yes that's my long-term prognoses. The China boom was just attributable to favorable demographics coupled with the government slack on free-market fiscal reform. Their monetary manipulation tactics for trade arbitrage will ultimately become ineffective in due time. India is more of a service-based economy with it's hallmark being IT and computer technology. I could see the potential therein, but net investments are diluted by the out-of-control population. Brazil, on the other hand, is set to boom.

    QE mainly benefits the institutional traders, who benefit from the reduction of risk that the injection of cash brings to their positions. None of those rises are anything close to permanent - barring any investment in productive capital, those are nothing but bubbles that will pop as soon as the cash works its way down to the black hole that is private debt.
    Yep. The decreased liquidity risk allows these speculators to leverage more, and given that there's no such thing as "diluting" futures contracts or the commodities themselves - the market gets saturated on its way up and crashes dry. We've had a decent correction in commodity prices, but apparently they just don't want to make new lows.

    I'm very apprehensive with the Greece mess. I mean, re-profiling isn't default per se, but it does breach the terms of the notes. Obviously default is almost guaranteed, but how how long do you think they can kick the can down the road?
    got chaos?

  6. #96
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    Quote Originally Posted by MoneyTick View Post
    Yes that's my long-term prognoses. The China boom was just attributable to favorable demographics coupled with the government slack on free-market fiscal reform. Their monetary manipulation tactics for trade arbitrage will ultimately become ineffective in due time. India is more of a service-based economy with it's hallmark being IT and computer technology. I could see the potential therein, but net investments are diluted by the out-of-control population. Brazil, on the other hand, is set to boom.
    The other big issue to consider in the case of India is even if they do continue their tech boom, they're going to be pinched by two things: first, the tendency these days of multinationals and their favored governments to strictly enforce rent-seeking (sorry, I mean intellectual property), and second, the severe shortage in rare-earth metals that we will almost assuredly see in the next decade. Those chips don't just grow out of thin air.

    Brazil's an interesting case. While they certainly put many of their neighbors to shame, wealth disparity is still enormous - which is fine if you either want an economy with heavy state interference (as they have now), or massive boom-bust cycles as demand fails to keep up with prodigious production. China's a huge trade partner of Brazil as well, which means that they will have to anticipate that speedbump in the near-future. We also cannot forget that the real is pegged to the dollar: any sort of dollar shock would severely shake the Brazilian economy, while removing that peg would likely lead to hyperinflation, given that they will no longer be able to rely on clean conversion to dollars for international trade; instead, they will find that absent an oil bourse (not outside the realm of possibility, but practically suicidal for a non-nuclear power), demand for reais is simply not there.

    Interesting article: http://www.soundsandcolours.com/arti...currency-wars/

    Yep. The decreased liquidity risk allows these speculators to leverage more, and given that there's no such thing as "diluting" futures contracts or the commodities themselves - the market gets saturated on its way up and crashes dry. We've had a decent correction in commodity prices, but apparently they just don't want to make new lows.

    I'm very apprehensive with the Greece mess. I mean, re-profiling isn't default per se, but it does breach the terms of the notes. Obviously default is almost guaranteed, but how how long do you think they can kick the can down the road?
    No one's willing to make new lows because everyone's playing hot potato right now and doing it without feeling any sense of risk, because after Lehman, TARP and Obama's Wall Street policy, no one thinks that they really stand a chance of actually holding the potato at the end. Corrections start, but the institutional guys sweep in, pick up a bunch of futures on the cheap, and keep reinflating those bubbles. They then go hedge the risk to make the books look clean, and do not care for a second whether or not it'll work, because they're part of a company that we all accept as too big to fail. Meanwhile, the bullish day traders end up getting stuck with the bag, when the institutional guys dump these futures off to let off a bit of steam, and make people think that they can get in during a slight correction (i.e. bull trap). Then, when everyone's getting soaked (which they conveniently shorted), they go ahead and cover their shorts, and clean back up, wondering why the marks always fall for the same crap.

    It's the internet age. The big guys know everything at exactly the time that anyone can know anything. They also pay guys to obsessively focus on the most boring parts of the world, just so they know when things are going to shift by thousandths of a point.

    It's put up or shut up time for Greece. That being said, all of this is nothing but economic warfare - the Greek default helps ensure that the dollar remains the reserve currency of the world. After all, it wouldn't do for everyone else to have other options while the guys at top suck that sweet, sweet rent from the globe.

  7. #97
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    Quote Originally Posted by MoneyTick View Post
    I'm very apprehensive with the Greece mess. I mean, re-profiling isn't default per se, but it does breach the terms of the notes. Obviously default is almost guaranteed, but how how long do you think they can kick the can down the road?
    Either eurobonds will be issued (or something akin to them), or eventually all the euro nations will go back to their past currencies (and that will be an enormous mess for everyone). I'm willing to bet on the first outcome, since everyone involved stands to gain from such choice over the medium term.
    ENTj 7-3-8 sx/sp

  8. #98
    Senior Member Little_Sticks's Avatar
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    Quote Originally Posted by ygolo View Post
    Opinions?
    US is in a decline. Taxes on the rich and cutting social security won't create any wealth. To create wealth we should be tapping into unused resources, which Obama has not been achieving. So we'll lose a lot of our economical power and then people will start using the resources we've untapped in the country to try to subvert that while foreign nations take advantage as investors and become our big bosses. But nothing serious or important will be done about anything until people see directly that something needs to be done. Right now nothing needs to be done.

    It's deserved though. Maybe this is karma for the way people use the abstract and many defined idea of capitalism as a way to counter ethics. Capitalism is not symbiotic and cohesive enough to agree on long-term economical strategies; this is how capitalism crumbles in the long run, since it's based on everyone greedily scrambling like cockroaches for what they can get or what they feel they have to do themselves. It's a system of government based on how viruses thrive. Instead of collectively sustaining ourselves and our ways of living (our environments as the host), we individually take as much as we can without the other people in mind and hope we won't have to deal with the long-term problems of economical starvation in our lifetimes.

  9. #99
    ^He pronks, too! Magic Poriferan's Avatar
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    I'll just throw this into the line of discussion.

    The USA is screwed if it can't regain some domestic productivity. This probably leads to the unpleasant task of weening off of China.
    Go to sleep, iguana.


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  10. #100
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    Quote Originally Posted by Little_Sticks View Post
    US is in a decline. Taxes on the rich and cutting social security won't create any wealth. To create wealth we should be tapping into unused resources, which Obama has not been achieving.
    This might be the last chance to impose a more egalitarian system on the world before Western influence is eclipsed by cut-throat capitalist developing nations where disparity is considered to be something to be proud of by the wealthy.

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