Bullish On The Dollar

[libertad]

Quote from Misthos:

England is doomed. It's a nation of bullshit banks, spoiled pensioners and diminishing North Sea oil. What a future.

I'll make a ridiculous forecast: In 20-30 years, England either joins the Amero (lol) or the Euro. And don't expect either North America or Europe to be fighting over her.

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What has to happen for both countries is to re-establish manufacturing....

Both have to compete head on with BRIC....

When the average family walks into the average retail box....they buy and support BRIC....

When the average family buys fuel....they mostly support some other country....

When the average family walks into a retail box....and thus buys fuel....whereby both sources are the native countries....then recovery and new economic strength can take hold....

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Both countries could literally make this happen within a short time frame by merely converting their tax policies to one of a sole consumption tax.....10% local....5% federal....

Everything else will fall into place....

All it takes are two signatures into law....

And there really are no other viable solutions....

Otherwise.....a race to the economic bottom....

The orchard cut down....never to grow back....

 

[Misthos]

Quote from libertad:

........................................................................

What has to happen for both countries is to re-establish manufacturing....

Both have to compete head on with BRIC....

When the average family walks into the average retail box....they buy and support BRIC....

When the average family buys fuel....they mostly support some other country....

When the average family walks into a retail box....and thus buys fuel....whereby both sources are the native countries....then recovery and new economic strength can take hold....

........................................................................................

Both countries could literally make this happen within a short time frame by merely converting their tax policies to one of a sole consumption tax.....10% local....5% federal....

Everything else will fall into place....

All it takes are two signatures into law....

And there really are no other viable solutions....

Otherwise.....a race to the economic bottom....

The orchard cut down....never to grow back....

Can't re-established manufacturing without some major pain that the banks will not allow. You know what that pain is?

To re-establish manufacturing, you need to be wage competitive with Asia. In order for that to occur - Real Estate really has to crash so people can afford shelter with their new low wages. Banks will not let that happen.

Manufacturing will become local one day. You know how? We reach peak oil - production levels off and demand continues worldwide... oil at 200 a barrell will make pushing plastic crap across the Pacific Ocean very expensive. It will happen. Give it 5-10 years at the very most.

 

[libertad]

Quote from Misthos:

Can't re-established manufacturing without some major pain that the banks will not allow. You know what that pain is?

To re-establish manufacturing, you need to be wage competitive with Asia. In order for that to occur - Real Estate really has to crash so people can afford shelter with their new low wages. Banks will not let that happen.

Manufacturing will become local one day. You know how? We reach peak oil - production levels off and demand continues worldwide... oil at 200 a barrell will make pushing plastic crap across the Pacific Ocean very expensive. It will happen. Give it 5-10 years at the very most.

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Review this....

http://en.wikipedia.org/wiki/Tax_rates_around_the_world

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The 10/5 C tax will drive many of the world's companies to the domicile of the C tax only....

Secondly, the asset valuations alone will skyrocket.....particularly when the exchanges are relevently regulated and tax free....this reduces the cost of capital and provides for better distribution of wealth by merit....

Immigration in a very big way....from the world's best entrepreneurial talent....

Taxes and legal largesse comprise a higher portion of product prices than does labor....

And could be changed by signature.....

Total valuations from exchange traded assets alone would dwarf the previous economies....

 

[Kassz007]

Quote from Susannah:

gold, commodities, the stuff you buy with currency.

But if those commodities are denominated in major currencies, and you are bearish on major currencies, logic would dictate thatt the value of those commodities would decrease as well.

 

[Debaser82]

Quote from Kassz007:

But if those commodities are denominated in major currencies, and you are bearish on major currencies, logic would dictate thatt the value of those commodities would decrease as well.

I like goldstocks because you are hedged both VS dollar depreciating (gold and the stock would rise in such a scenario countering the drop in the $) but if the dollar suddenly would rise substantialy you are still hedged to an extend as well because your stocks are $ nominated.

The same could apply to other commodity related stocks but the link with the $ is less obvious in those I think.

All momentum depended as well ofcourse.

You can still loose eitherway.

 

[libertad]

Quote from Debaser82:

I like goldstocks because you are hedged both VS dollar depreciating (gold and the stock would rise in such a scenario countering the drop in the $) but if the dollar suddenly would rise substantialy you are still hedged to an extend as well because your stocks are $ nominated.

The same could apply to other commodity related stocks but the link with the $ is less obvious in those I think.

All momentum depended as well ofcourse.

You can still loose eitherway.

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Exactly.....


If there was $70 Trillion initially

30 Trillion was subtracted

12 Trillion "unsustainable govt. debt programs"

This leaves 28/70.....

"All of it" can be priced down....
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If "mark to market accurately" comes back into vogue....then debt destruction has a long way to go.....

 

[sakhter]

When the dollar does good, the EURO does better.

 

[makloda]

Quote from Debaser82:

I like goldstocks because you are hedged both VS dollar depreciating (gold and the stock would rise in such a scenario countering the drop in the $) but if the dollar suddenly would rise substantialy you are still hedged to an extend as well because your stocks are $ nominated.

It's an intruiging and intuitive idea, but it didn't hold up historically. Doesn't mean much for the future of course, it's just a validation of the idea into history so take this with a grain of salt.

$XAU gold bug price index (doesn't include dividends) measured in EUR, 25 years from 1984 - 2009 (backadjusted via Deutsch Mark pre 1999). Monthly data.

This period covers major USD bear and bull markets.

 

[libertad]

If the economy starts at:

70

then

40

then

28

and declining....

to ? 15 after mark to market ?

All of it.....shifts down.....

All of it.....


What can you buy when you had 70....

and now you have 15 ??????

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When milk is poured on the ground....

When operable vehicles are trashed....

This is not rational economics....

Now that one has 15....one is going to pay a higher price as if the economy were 70/70 or above....?????

NFL

Not for long.....

Taxes increasing on what is left ?????

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Hence the need for the right people in govt....
who are willing to enforce a 10/5 C tax only....

This is the only way out.....that offers a sustainable, sensible economic solution....

Or does one continue bank valuation hocus pocus accounting lies....????

 

[Covertibility]

Can't believe Robert Prechter: 100-Year Bear? still gets press coverage.

The "Keep moving the lines around til they fit" Elliott Wave is a joke.