By: jaymarcel
28/10/2009
12:56 pm Yahoo! Profile:
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I was going to make an entry but I'd rather just watch you guys battle it out over all these people just sitting around for years with assets that are worthless & all these other people piling up their cash doing nothing & owning nothing.
I wonder if there will be a winner. |
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By: mentawaisurf
28/10/2009
12:55 pm Yahoo! Profile:
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| Jade, even with a 250% jump in the price of oil from its low, deflation still persists in the major economies of the world. What we do have is 'fear' of imminent inflation, and rising interest rates here in Australia, just as we did back in late 2007-early 2008. Yet inflation still remains benign. |
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By: jadeshangrila
28/10/2009
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| Oil has lost it's elasticity and we cannot have it go up to 140USD like before that is when hyperinflation will kick in. If someone found alternative energy today Dow will soar past 13000 tonight. |
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By: jadeshangrila
28/10/2009
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| Menta, as I mention a week ago this market is being spoke by peak oil syndrome not debt deflation or anything else that man can create. If oil falls by 10 USD today we woyuld have a huge rally tonight. |
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By: ecchi.gaijin
28/10/2009
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"the lack of liquidity will cause people and institutions to sell their assets to get dollars."
What are people going to use the dollars for? Just fun and kicks to have cash or to actually spend it? hmmm would spending be pro or contra to the deflation? |
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By: mentawaisurf
28/10/2009
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| There remains an unwavering belief that we are entering an era of inflation. Yet both consumer and bank credit are contracting, despite all efforts by governments and central banks world-wide, which is seeing deflation persist. As deflationary forces intensify, together with the resumption of the underlying bear market trend, the lack of liquidity will cause people and institutions to sell their assets to get dollars. This includes stocks, commodities, property, gold - anything and everything! |
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By: ecchi.gaijin
28/10/2009
11:22 am Yahoo! Profile:
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"I believe Keen forecasted a 40% fall over 10 years from about 2007."
"It breaks my heart. But I don't want to live my old age in poverty and there's no point in paying a mortgage on an asset that is going to fall by 40 per cent or so in the next few years."
10 years is "in the next few years"? |
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By: jaymarcel
28/10/2009
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| Menta by then prices would have probably gone up by 40% to 50% so your saying they will drop to todays prices, as asked many times before, why? Why would they drop? |
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By: lasty49
28/10/2009
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Making projections 10 years out, Menta, is a big call.
Some people cant even get it right in 6 months let alone 10 years ;-) |
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By: mentawaisurf
28/10/2009
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| Jay, while our share market is so liquid it could fall 40-50% within weeks, it will take our property market years to deleverage. I believe Keen forecasted a 40% fall over 10 years from about 2007. I'd say by about 2012 we should be well on our way (the underlying trend should even become apparent as early as late 2010). |
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By: jaymarcel
28/10/2009
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So menta your not willing to accept any set of circumstances that may prevent an Ozzie property price collapse of 40%-50% withing the next say 2 years?
Thats me being very generous with a timeline. |
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By: ang101000
27/10/2009
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Sorry, I'm still working on Chinese word processor (for an other two weeks, day and night).
correction;
cam should be 'calm the tempers'
Sooner or later I will be back at my computer, can't wait for it (: |
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By: ang101000
27/10/2009
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Lasty,
after all that agro on the other threads here is something to cam the tempers;
The balance of global economic power is shifting from the west to the east. There have been several moments that seemed to crystallize the zeitgeist, none more memorable than U.S. Treasury Secretary Timothy Geithner's speech in June before the best and the brightest at Peking University, the Harvard of China. Not long ago, students there would have been the most respectful and polite of audiences. Yet when Geithner tried to reassure one questioner that China's investments in U.S. government debt were "very safe," the response was perhaps an indication of the onset of a new economic order: the students laughed.
Earlier this year, Chinese leaders, worried about the strength of the U.S. dollar and the safety of their own $763.5 billion investment in U.S. Treasury Department debt, called for the creation of an alternative to the greenback as a global reserve currency. More recently, Beijing has signaled an intention to slowly establish its own currency, the renminbi, as a dollar alternative in international trade by providing subsidies for Chinese companies to price their exports in renminbi. One economist, Qu Hongbin of HSBC in Hong Kong, goes so far as to say that 40% to 50% of China's overall trade flows could be settled in renminbi by 2012 (though few other economists believe this will happen anywhere near that fast). |
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By: mentawaisurf
27/10/2009
2:54 pm Yahoo! Profile:
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| 'Yet' is the word you are missing. |
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By: jaymarcel
27/10/2009
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| I would agree to some degree, but it appears not when it comes to ozzie housing. |
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By: mentawaisurf
27/10/2009
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| Jay, if there is anything that we've learnt over the last few years it's that we live in a global financial system. |
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By: glh40
27/10/2009
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There is No recovery except on the political Lips and their apologist co-hoots the real markets crashed in March 2009... what you have Now is Worldwide Currency Debauchery this is why they call it Green shoots of the Greenback Dollar which this week will Auction 123 Billion the biggest ever Green shoots .: as for Gold this is the usual end of the Month Shennanagins on Thursday by Nov 17th New Highs, Perceptions are Everything,: this dollar rally, lower euro and gold is more than just good luck with option expirations and the largest of ALL US Treasury auctions this week...Financial grand larceny 101 is alive and well for now..... Gold get you some..!!!
Bloomberg
S&P 500 Overvalued by 40%, Set to Fall, Smithers Says
http://www.bloomberg.com/apps/news?pid=20601110&si d=aIivrT347BzE |
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By: jaymarcel
27/10/2009
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| Hi Menta, Yes the banking system in the USA is still looking pretty messed up, lucky I have no plan to emmigrate there & Australia is in such great shape. |
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By: mentawaisurf
27/10/2009
11:15 am Yahoo! Profile:
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Meanwhile, further instability of the US financial system would lead to another wave of global financial crises;
The Banking System Is Still Broken;
http://online.wsj.com/article/SB100014240527487041 07204574475090112251868.html
And while bank failures continue to spike across America, one of the largest US commercial real estate lenders has just filed for bankruptcy protection amid mounting bad debt. This may signal the next phase of the real estate crisis, that of commercial real estate loans going bad and defaulting - en masse.
http://finance.yahoo.com/news/Capmark-Financial-fi les-for-apf-2710240959.html?x=0&sec=topStories&pos =main&asset=&ccode= |
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By: jaymarcel
27/10/2009
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Hi jades sorry I'm a bit behind as I've been away & now trying to play catch up on these forums, but I agree with your comment to Menta on the 16/10 at 7.30pm about reading others books & articles as they are almost always bias towards their investments (I'm a good example with my property rants even though I claim to be unbias, keen sells his property then talks of property crashes).
Getting out there & using (hard to find) unbias data is the way to go.
One thing I do agree on with Menta is I think gold is close to its peak for now & as the recovery arrives it will start to fall.
I've forgotten who replied to my inflation question but thanks anyway, I thought house prices also were included in inflation calculations.
That appears to be the biggest problem with our system, prices of everything goes up so inflation goes up so our wages go up so prices go up. |
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By: lasty49
27/10/2009
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Menta,
Here lies your problem..
China has $2.3 Trllion in reserves much of those are in US dollars..
If their stimulus dries up do you honestly think they will leave that money in a foreign bank account whilst they see their own country crumble? |
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By: ang101000
27/10/2009
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Menta,
'The real risk is that once the Chinese stimulus dries up'; Yes, agree with your view: that is an 'enormous' risk and it is a risk in every developed country not just the developing world.
Thank God, there is also India, which is even more resource poor than China.
That is not to say that I agree with the type of economy Australia has. It infuriates me! This society places the highest financial reward on digging up and shipping commodities to Asia. There are more intelligent way to make money than to rely on selling the dirt from under your feet.
Oh well, perhaps I'm regretting of spending time learning useless subjects instead of becoming a miner (: |
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By: mentawaisurf
26/10/2009
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Ang, your faith in China's economic revival of Australia's fortunes reminds me of the same misplaced faith in Ja pan's booming economy during the late 1980s. Likewise, back then it was Ja pan's insatiable appetite for our resources and their booming economy that would ensure our economy prospered and their seemingly unlimited investment would keep our asset bubbles inflated. I remember here on the Gold Coast the growing anti-Ja panese sentiment blaming their huge investment for pushing up real estate prices at the expense of the locals. Only a few years later these same locals were buying properties back from the Ja panese at half and even a fifth of the price that they sold them for. But I digress...
China's stronger GDP figures largely shows a speculative bubble has kicked off in Chinese assets thanks to expanded bank lending and the huge government stimulus. What's more, it will takes years for an economy as large as China's to shift from an export driven model to a domestic consumption model. They still remain highly dependent on US consumer spending for sustainable economic growth.
The real risk is that once the Chinese stimulus dries up, so too will demand for Australian resources. Also, China will see a major correction in the stock market (up over 100% this year) and in real estate. The unprecedented liquidity boom in China will have to give way to an asset bust. For Australia it means the recovery from the March lows is imperiled by the reality that recent Chinese resource demand has been largely artificial.
China's New 'Great Wall' Built on Easy Money, Speculation and Toxic Debt;
http://finance.yahoo.com/tech-ticker/article/29100 0/China%27s-New-%27Great-Wall%27-Built-on-Easy-Mon ey-Speculation-and-Toxic-Debt?tickers=FXI,FXP,RTP, PGJ,XPP,TAO,EEM&sec=topStories&pos=9&asset=&ccode= |
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By: ang101000
25/10/2009
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continued
At its core, despite embracing many aspects of the market, China runs a top-down, command-and-control economy, and its success so far in skating through the recession relatively cleanly may encourage other developing countries to adopt its brand of capitalism.
A few years ago, the notion that China could drive global growth, would have seemed absurd. After all, China's economy was dependent on manufacturing, which was in turn dependent on demand from the U.S., the world's undisputed economic locomotive. But that engine remains sidetracked. The IMF predicts the U.S. economy will contract 2.6% this year. American home prices continue to fall in some cities, while the unemployment rate has soared to 9.5%, the highest since 1983. The U.S.'s much ballyhooed stimulus plan has so far yielded little measurable benefit, save putting some spark back in stock markets. The absence of real signs of recovery has Washington discussing the possibility of yet another round of stimulus spending, despite a ballooning federal budget deficit.
The speed and relative success so far of China's stimulus stands in stark contrast with that of the U.S. According to a recent study by the World Bank, Beijing's government spending will generate more than 80% of the country's overall economic growth this year. This is partly because China was already in the midst of a nationwide infrastructure program when the recession hit. Emergency spending measures simply added to existing schemes already under way. In other words, the projects really were shovel ready, and the money hit the streets quickly, and in large dollops. Outlays on new railway construction, for example, were $41 billion last year. They will be $88 billion this year. Says one senior FORTUNE 500 executive: 'In the U.S., NIMBY [not in my backyard] is still the order of the day, whereas in China it's more like IMBY. They build where they want, when they want. And they move fast.' |
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By: ang101000
25/10/2009
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Menta,
Your analysis is very sound and true for USA, not Australia. It is true: the US consumer market is still the largest in the world, and as such, global economic recovery is dependent on the return of the US consumer spending and confidence.
However, Australia's economic growth is more reliant on its mineral resources and intellectual resources/services (exp education) exports to China and Korea than on the trade (mostly imports) with USA.
The U.S. has a $14 trillion economy; China's is $4.4 trillion. The U.S. accounted for nearly 21% of total global GDP last year; China just 6.4%. Chinese consumption, in other words, is growing; but is still insufficient to lift the world's advanced economies out of recession. Consumer spending drives less than 40% of China's GDP; in the U.S. before the bust, the consumer accounted for almost 70%.
China had a slump in exports late last year, but on the back of a $586 billion government stimulus program (about 13% of GDP, spread over two years), China has snapped back. The economy will expand 8% or more this year. Numbers alone do not capture the sense that the balance of global economic power is shifting eastward.
Nations that depend on producing commodities, such as Australia and Brazil, have benefited immensely from the Chinese demand. Overall, the International Monetary Fund (IMF) forecasts that in the three years from 2008 to 2010, China will, astonishingly, account for almost three-quarters of the world's economic growth.
In recent months, Beijing has started to throw its weight around. China seeks (and will almost certainly soon get) greater voting rights in the IMF. In June, China bought up to $50 billion in bonds issued by the IMF to boost the fund's capacity to deal with the global financial crisis.
Beijing never signed the Washington Consensus (1990) on global economic policy, which called for free trade, privatization, light regulation, prudent fiscal policies and free capital flows. |
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