Very interesting take on the US economy, the Federal Reserve, the debasing of the US dollar and foreign investment. Good info. From the Financial Times http://www.ft.com/cms/893ac9c8-757e-11dc-b7cb-0000779fd2ac.html http://en.wikipedia.org/wiki/Jim_Rogers `
Good video. So true. It's also great how every intelligent person and every one with common sense seems to back Ron Paul.
His advice for investing in China could prove to be a valuable hedge against a collapsing U.S. economy. Of course, it's also a classic case of the prisoner's dilemna, because if everyone pulls some of their investments from U.S. stocks and puts them into China it will cause the collapse in the U.S. market.
We don't owe the rest of the world over $13 trillion. The actual figure is less than $3 trillion according to the official report by the Treasury. The dollar is bearish for the obvious reason and that is excessive fiscal spending. That's the source of the deficit. Jim Rogers and I are on the same boat as far as market outlook goes, just for different reasons.
Jim Rogers is too bullish on China. Why? Because China is an export and investment driven economy. The share of domestic demand (= local consumption) in GDP has been decreasing over the years. The more Chinese make, the more they save. 25% of their income is saved for rainy days. Investments= prediction that demand will pick up. What if it doesn't? What's going to happen to tens of millions of factory workers if Westerners stop buying Chinese products? Never say never. We never know. http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/10/17/bcnchina117.xml "EU attacks China's trade empire" Exports= China relies mostly on American and Western European consumers for its trade surplus. Other points: - China has a very undervalued currency, and the government said they want to let it float, it could have serious consequences since China has a huge trade surplus and the US a huge deficit. - China stock market bubble. What's going to happen to all the Chinese who have bet their life savings on the stock market? http://news.google.com/news?hl=en&safe=off&q=china+bubble&um=1&ie=UTF-8&sa=N&tab=wn - Political instability. Chinese are very upset. In emerging markets, wealth is very concentrated (and so is growth), and corruption is widespread. http://news.bbc.co.uk/2/hi/asia-pacific/7039383.stm And the list can go on. So things don't look so simple. In a global world, economies are inter-connected, any potential mega-crisis would go global from the US to China, or from China to the US. http://en.wikipedia.org/wiki/Globalization
We're not debating whether the USD is getting weaker; we're discussing the cause of it. I think it's largely because of our fiscal policy. The majority tend to think that it's because of our monetary policy.
Our monetary policy allows for a central bank that practices fractional reserve banking, does it not?
Our monetary policy, implemented by the Fed, restricts the (commercial) banks' ability to practice fractional-reserve banking. Fractional-reserve banking has been around since the time our currency was backed by gold and silver. They simply used Gold/Silver Certificates rather than Federal Reserve Notes.
This may be is not a very popular idea but I think the cause of USA problems are the cultural changes that has happened. Some how people in USA believed the line in the Wall Street movie that "Greed is good" and every one is so much concerned with how much they can get today that they don't care about anything. The whole USA leadership both in government and industry are like a group of thieves in big fancy house, trying to steal as much as they can before the cops arrive and normal people have also lost their sense of right and wrong and try to copy the leaders as much as they can. You can discuss many factors such Iraq war, interest rate or the destruction of USA's manufacturing base but the more important question is why those decisions were made.
I would say that people of nearly all nationalities are that way. A lot of the scammers on DP, for example, are not from the States. The US stands out the most because it is such a powerful economy.
It is very different, we have corruption in Canada but our politicians and industry leaders don't behave like they are running out of time and they should steal as much as they can before the cops arrive. It is hard to describe but I have lived in different countries including USA and I can see the difference. USA has changed in the last 30 years and it looks like your leaders have no hope for future and they just want to get as much as they can today. Nobody wants to work and earn money, everyone is after the latest scam to get rich quick.
If you haven't noticed, the same country that you are describing as a greedy thief also happens to have some of the most generous philanthropists in the world. The US does more harm than Canada, but it also does more good. This is because the US is more powerful, and everything it does influences the rest of the world. Besides, you wouldn't be on your computer viewing this forum if it weren't for the Americans acting in their own self-interest.
You just don't get it. I am not describing USA as greedy thief, I am describing your politicians and industry leaders as people with a thief mentality. people are not interested in long term business, people are not interested in working and making something. Everyone is just after a quick buck. Nobody said that they should not have self interest. It is part of business but while previously industrial leaders produced viable and profitable businesses, today they produce Enron and worldcom.
Yes, US businesses are evil and they will do anything to benefit themselves at the cost of others, so throw away your computers, and boycott everything that is US made. Put your money where your mouth is, son; see how long you can survive.
Your posts are becoming more and more stupid, if you can not discuss something rationally then may be you shouldn't. I have been involved in business for the last 30 years and I still have businesses in USA while most likely the closest you have come to having your own business was working as paperboy.