Comments on: Selective Socialism http://www.dailyreckoning.com.au/selective-socialism/2008/11/07/ An independent perspective on the Australian and global investment markets Sat, 21 Nov 2009 17:27:32 -0600 http://wordpress.org/?v=2.8 hourly 1 By: Coffee Addict http://www.dailyreckoning.com.au/selective-socialism/2008/11/07/comment-page-1/#comment-51346 Coffee Addict Mon, 10 Nov 2008 00:09:31 +0000 http://www.dailyreckoning.com.au/?p=4337#comment-51346 For the US economy, just about everyone who travels across this web site would agree Puru's conclusion that the worst is yet to come. The fundamentals just don't add up and there is no more debt to be had - particularly as economies such as China, Japan, S.Korea and Taiwan start using their mountains of dollars to reengineer themselves. The Bush Administration had no option but to keep most of the banks open so the socialisation of the losses was inevitable. The complete collapse of the USD is in my view absolutely inevitable. The good news is that the USD collapse will enable some US industries (including automobiles) to compete more effectively in global markets. The US has to reengineer towards high quality manufacturing and export while Asia needs to reengineer the other way, towards greater domestic consumption. Fine this always needed to happen. The bad news is that it will take a number of years to happen. I don't have my head around the European situation. Are there any ideas out there beyond the prediction that Europe (and many other regions) will just roll with the punches? For Australia, any massive reengineering in China (and elsewhere) will be very very good news as it will involve infrastructure spending and (eventually) more mature household income and consumption patterns. The medium risk for Australia is the strong nexus with the US economy and that small matter of national debt. The market shall dictate soaring interest rates and double digit inflation in debtor economies. For the US economy, just about everyone who travels across this web site would agree Puru's conclusion that the worst is yet to come. The fundamentals just don't add up and there is no more debt to be had - particularly as economies such as China, Japan, S.Korea and Taiwan start using their mountains of dollars to reengineer themselves. The Bush Administration had no option but to keep most of the banks open so the socialisation of the losses was inevitable.

The complete collapse of the USD is in my view absolutely inevitable. The good news is that the USD collapse will enable some US industries (including automobiles) to compete more effectively in global markets.

The US has to reengineer towards high quality manufacturing and export while Asia needs to reengineer the other way, towards greater domestic consumption. Fine this always needed to happen. The bad news is that it will take a number of years to happen.

I don't have my head around the European situation. Are there any ideas out there beyond the prediction that Europe (and many other regions) will just roll with the punches?

For Australia, any massive reengineering in China (and elsewhere) will be very very good news as it will involve infrastructure spending and (eventually) more mature household income and consumption patterns. The medium risk for Australia is the strong nexus with the US economy and that small matter of national debt. The market shall dictate soaring interest rates and double digit inflation in debtor economies.

]]> By: Total Economic Collapse « Flee the Wrath http://www.dailyreckoning.com.au/selective-socialism/2008/11/07/comment-page-1/#comment-51013 Total Economic Collapse « Flee the Wrath Fri, 07 Nov 2008 02:18:14 +0000 http://www.dailyreckoning.com.au/?p=4337#comment-51013 [...] If you would like to read the article in it’s entirety, you can find it here : Selective socialism [...] [...] If you would like to read the article in it’s entirety, you can find it here : Selective socialism [...]

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