Stephen Roach's Latest

[Guest yobob1]

Assteroid, I also see a bifurcated market coming down the pike. I have poised my business to take advantage of that by tailoring my product offerings to those demographics that I think will do better than most. At the same time my service shop has kept a lower rate on labor than anybody else. By cutting my daily operating expnses 50% over the last 3 years I can afford to do this. My parts store prices are reasonable. So far the strategy has been successful, it has allowed me to stay out of the middle ground which has been a real meat grinder. The middle is where Joe Six Pack lives and he's not going to do well, primarily since he is a finance buyer. I'm not planning on getting rich as much as I'm planning on being around after the competition bites the dust.

 

Here's another view of the inflation/deflation argument:

Understanding Inflation and Deflation

 

Your outlook all depends on some underlying assumptions. Probably primary is what happens to Uncle Buckeroo. MH thinks the dollar will fall dramatically against other currencies. I don't, at least not in the intermediate term. I think the combination of the dollar being so widely held (both as reserves and in bond form) and the likely path of competitive currency devalutaions will keep the dollar bouyed. At some point it is entirely possible for the dollar to implode. My guess is by the time we reach that stage, the value of the dollar may be the least of our concerns. When a fiat currency fails, what is really failing is the faith in the government. That's when you get Argentina in LA or Seattle. The WTO riots you saw will seem like a calm gathering of a few intellectuals in comparison.

[machinehead]

The New York Times announced today that the newsstand price went up to one dollar, from 75 cents. When MH used to slog into Manhattan in the early 80s, he would feed 35 cents into the NYT vending machine at the train station. So that's tripled.

 

The George Washington Bridge toll is $6.00 eastbound, up from $1.50 in the late 1970s. That's quadrupled. My property taxes have more than quadrupled since 1980.

 

All this during an era which, at least during the Nineties, was consistently described as a low-inflation or even no-inflation era. What a laugh. What are you gonna believe: what 'they' say, or your lyin' eyes?

[Hypertiger]

The debt inflation of the population is all that matters, and once that stops debt deflation is the result... It's over everything will deflate eventually.

 

It takes time the last 3 years was the "Old college try stage" next year is the "fall flat on your face stage".

 

Do you see the debt deflation? If the economy was producing the needed amount of debt to continue inflation Capital stool would not exist or command the respect that it does. Plain and simple.

 

The banking system will collapse, and 100's of 1000's of companies will blow to pieces and be vaporised overnight before this is over.

 

1/Debt inflation 2/debt deflation 3/bankruptcy

 

The 123 program is all that matters...

 

We ain't seen nothing yet...

[Guest yobob1]

In 1986 I bought an IBM 286 with an Okidata 320 microline printer for $4,200. A month ago I paid $630 for a 1.5 Ghz Compaq loaded to the gills. The printer I will buy is a Lexmark X75 incorportating a flatbed scanner and a copy feature..$129

 

The 1995 Dodge Pickup we purchased new can be duplicated today for the same or less money with more features.

 

In the mid 80's a 27" TV would set you back close to $1,000...today $300 or less.

 

RV prices have been stagnant or falling for 3 years.

 

Newspapers are nuts. In most cities they have a monopoly. Our large paper in the valley has raised classified rates every year for the last 3 years an average of 10%. Odd the number of ads is declining, which I'm sure is what is happening to the NY Times. They have raised the price to compensate for lost ad revenue. If they start losing subscribers because of that what will they do then?

 

Sure your property taxes went up. The government doesn't give you the opportunity to shop around for the best tax rate, and if you don't pay it they will sell your house. Has your property increased in value any?

 

Try again MH, but try looking at things that are not virtual monopolies or mandated "pricing". Even those items will find their limits.

[Goldmember]

Yobob, I won a free cheap Lexmark printer in a small town newspaper hockey pool last year. Z33 model. Ran out of black ink and while in Vangroovy I thought I'd reload some ink. Wow! Might as well have bought a new cheap printer! I think the HP's have a much larger capacity ink cartrige, I'm not sure.

 

Anyway I was so pissed off at the price of ink I brought up a Lexmark chart and bought some December puts. This was sometime in November. As the market continued it's silliness I thought I'd thrown that money away and was looking at REALLY EXPENSIVE INK! Getting right down to the wire, with two days to go I am remaining hopeful and optimistic that free ink for a long time to come will prevail. :grin:

 

 

[assteroid]

Yobob, Machinehead, Thanks for further illustrating my point. Weird, weird economy. So much rests on the dollar, as you point out, Yobob. All I know is I can make out like a bandit if I buy anything made abroad, but services or goods produced by the domestic economy are pretty much out of sight. I don't think the dollar will plummet, but even a slight drop against other currencies, coupled with rising gasoline and utility hikes will impact cheap goods. I think prices there will rise.

 

The people who are going to take it in the pants, are people like massage therapists, and other alternative healing services that charge outlandish prices. House cleaners catering to the wealthy to the tune of 25.00 per hour, will have to accept less. Now, it's tough work, so I don't begrudge them, but they're going to have more and more competition as unemployment benefits dry up.

 

There are so many people who are servicing a pool of middle class that are dissappearing. The wealthy need only so much massaging, rolfing, crystal analysis, cranio sacral work. But they seem to have an endless need for domestic help. (It's so hard to find decent help!--remember that one)

 

And the "re-birthers"-- just how many of the wealthy really need to have their head squeezed between someone's thighs at $200 a pop? They're not all as crazy as Tony Blair and wife.

 

Goldmember, You sure like B.C, don't you?

[EasyAl]

Here is another interesting article. The author think that the trouble with Alan Greenspan?s handling of the economy goes much deeper than an ill-timed interest-rate adjustment or inaccurate staff forecast. It?s embedded in the Fed?s increasingly antiquated machinery for implementing monetary policy. In Rebuilding the Transmission System for Monetary Policy, author Jane D?Arista diagnoses the problem and proposes a modernized policy mechanism that would enable Greenspan & Co. to deal effectively with asset bubbles and deflationary pressures alike.

[Guest BEARDRECH]

:shocked WITH EVERYBODY TALKING ABOUT THE INFLATION INDUCED DEPRECIATED CURRENCIES AND WONDERING ABOUT HOW THE EXCHANGE RATE WILL EFFECT CONSUMPTION ETCETERA ETCETERA ARENT WE FORGEWTTING THE MOST IMPORTANT UNDERLYING EVENT CURRENTLY UNFOLDING???: NAMELY GOLD GOLD AND MORE GOLD---AND ISNT GOLD AN INTINSICALLY VALUABLE TH ING? AND ISNT THINGINESS A WORD THAT PRELUDES WHAT ?? OH WHATS THAT OVER THWERE PEEKING ITS NOSE JUST OVER THE HORIZON?????? barter barter

 

BARTER

beardrech

[Guest BEARDRECH]

damn it how do you write the word barter in 14 ariel and

red like i wanted it

i feel like a typographical putz

beardrech

[Hypertiger]

beardrech

 

once you do [/COL0R] is the end of where you want the color to stop

 

[/slZE] is the end of where you want the size to go back to the default...

[Guest yobob1]

Nobody knows what's really happening in the gold markets, anymore than anyone can say at the end of the day that stocks went up because............(other than the obvious that more fools showed up than sellers)

 

For whatever reason gold's price has languished for a long time which lead to declining exploration and development of finds which has lead to reduced production. As a consequence of low prices the high grades have been what has been processed as the only way to turn a profit. That leaves falling high grade ores meaning that further production from currently operating mines will increasingly rely on lower grade ores meaning higher costs per ounce to produce as time goes on for many mines. I don't think that $800 an ounce was the "right" price in 1980. That was a speculative blow-off accompanied with interest rates near 20%. The real value was more likely somwhere around $300 to $400. Having said all that I would peg the current value of gold at around $800 on an inflation adjusted basis. IMO gold has some catching up to do more than it is reflecting current or upcoming inflation.

 

Personally I don't see a direct link of oil to gold. Oil is settled in dollars not gold. Neither gold nor oil has kept pace with inflation. Opec is the one that recently targeted oil at $25 to $30 and vowed to adjust production to keep it there. It appears that increasingly OPEC will be able to set the price if non-OPEC production is indeed peaking. How the rest of the globe reacts to that remains to be seen. Now if OPEC insisted that all oil be settled in gold, all hell would break loose.

 

Beardrech if you hit the "B" button notice than an asterick appears on the button. When you've finished typing whatever you want in BOLD, hit the "B" button again and it will insert the correct close. Example For the font, size and color dropdowns you can select one or all of the options, type whatever you want to have those changes and then hit the "close all tags" bar to the right and it will correctly terminate those options. You can also employ the bold, italic and underline features on the same set of words as long as you hit the astericked buttons when you have completed typing what you want. Order isn't important, just remember to close the feature you opened. Anthing opened will appear on your screen as [ ] and the close will be the same but with the forward slash at the lead inside the bracket like this [/ ]

[Goldmember]

I find it easier to just type in the brackets and appropriate symbols in capitals with the slash at the rear. Press "quote" on somebody else's posts and see how it works. Just type it in the same fashion. Remember capital letters. For dynamic images from the web add .gif to the end of the url before the final bracket set. The tags are convenient as well but I prefer to just type it in.