Use access key #2 to skip to page content.

alstry (35.96)

Alstrynomics I

Recs

12

December 18, 2008 – Comments (5)

The purpose in this series of posts is to debunk a bunch of myths that mainstream media and mainstream economics are throwing out there.

Number 1....Comparisons between the US and 1990s Japan.

First of all, intentional weakening of the dollar will not help America like it did Japan as many in the mainstream are trying to misguidely lead you.

Japan was an export based economy with a net savings rate among its people.  America is an import based economy with a negative savings rate.  In case you havn't noticed, we are in exactly the opposite position as Japan prior to the systematic devaluation of its currency with a ZIRP policy.

If, and I emphasize IF, our dollar devalues as the pundits are leading you to believe, our imports would get so expensive that Americans will have a very hard time just achievinig basic needs, less having any discretionary income.  In order for our economy to convert to an export based economy, our relative wages would have to drop dramatically....and I mean DRAMATICALLY in order to effectively compete the the emerging economies of Asia and India.

It is clear to me right now that the direction we are going is DEFLATION, but the pundits would like you to think the opposite.  It has gotten so bad that bank accounts are effectively yielding zero. 

What we face ahead is very very difficult times.  As I say, don't depair.....prepare.  It will not just be America...but the whole world.  Look forward to a rising dollar, falling commodity prices, and a falling stock market if this trend stays on course.

Clearly, Alstry is not in the main stream, but swimming with the crowd has never been my beach.

5 Comments – Post Your Own

#1) On December 18, 2008 at 11:47 AM, 4everlost (29.41) wrote:

Alstry,

Help me understand  "a rising dollar, falling commodity prices". It seems to me that when supply of the dollar is going through the roof demand cannot keep up which means it should go lower.  Add to that lower confidence in the USD and I figured that it could only go lower.  On the other hand supply of commodities is going lower due to limited production yet demand is going to stay at today's levels if not grow.  I don't know what's going to happen but would really like to understand your logic.

Keep up the good work!

Report this comment
#2) On December 18, 2008 at 12:09 PM, alstry (35.96) wrote:

 4ever,

"supply of the dollars" is relative to supply of the yen, or yuan, or euro, or whatever.......in poker you never play your hand, you play your opponents.  If dollars double but yuan triple, then dollars should become relatively stronger to yuan even though dollars increased.  1990s yen provide an excellent example of this issue.

as far as commodities, be  careful.  Demand for commodities declines as countries become poorer.  Right now, practically every country in the world is losing wealth....at some point this will change.....but from my perspective we are still a ways off.

Right now we are still in the knee jerk phase of fed behavior....let's see how things play out over the next few weeks and months. 

If my guess is right, we should see a DRAMATIC slowdown in the ecnonomy over the next four weeks.

Report this comment
#3) On December 18, 2008 at 12:19 PM, alstry (35.96) wrote:

INFLATION????????

Crude crumbles under $39

Rates plunge to 37-year lows

Dollar gains on euro after ECB cuts deposit rate

China cuts prices for gasoline, diesel

Rite Aid reports wider loss, cuts forecast

Hedge Funds: Liquidations surge to record in third quarter, HFR says

Capital outflows from Russia may hit $90 billion: report

Cash crunch may usher in consolidation wave for oil companies

THE ABOVE IS JUST FROM THIS MORNING.....IF THE GLOVE DON'T FIT.........YOU MUST........

Report this comment
#4) On December 18, 2008 at 2:43 PM, jegr5347 (< 20) wrote:

The flooding of the markets with dollars is barely keeping up with the destruction of net worth that is simultaneously occuring.

Report this comment
#5) On December 18, 2008 at 6:05 PM, zygnoda (26.80) wrote:

Not to mention that the dollars aren't really making it into the greater system.  The banks are sitting on their monies as I understand it.

Report this comment

Featured Broker Partners


Advertisement