Huh?
Do I misunderstand you? I thought you were clearly saying that you expect the USD to go UP, not down.
Why then the talk of shorting it?
Say goodbye to the Euro
- Thread starter Gcapman
- Start date
Do I misunderstand you? I thought you were clearly saying that you expect the USD to go UP, not down.
Why then the talk of shorting it?
Thanks for your explanation.
How does one trade on the dollar/Euro in a regular brokerage (Schwab, for instance) account?
Thank you.
Government spending above the level needed to create a stable, functioning civilised society is generally going to be value-destroying. If you accept that $1 in the private sector, on average, over the long-run earns a profit in excess of the cost of capital, and a marginal $1 in the government sector doesn't, then 20 years of excessive government spending is going to destroy a heck of a lot of value (at the annual rate of the productivity difference between private & public sector.) This should be especially the case now, as a lot of the stupid destructive excesses of the credit boom are not going to be repeated any time soon.
In other words, spending 100%+ of your GDP on bridges to nowhere, paper-shufflers and pork barrel projects is going to end painfully. Do that for 2 decades and it's a lot of value destruction. Less wealth/capital = lower real prices for assets.
Contrast that to the asset price gains from a private sector that gets liberated from heavy government control e.g. former communist countries going to mixed/capitalist economies, like China and the former Eastern Bloc. Although in the shorter-term some of that can be attributed to credit cycles, the long-run trend is still clearly up, growing by many multiples, and is commensurate with wealth creation in those economies.
In other words, spending 100%+ of your GDP on bridges to nowhere, paper-shufflers and pork barrel projects is going to end painfully. Do that for 2 decades and it's a lot of value destruction. Less wealth/capital = lower real prices for assets.
Contrast that to the asset price gains from a private sector that gets liberated from heavy government control e.g. former communist countries going to mixed/capitalist economies, like China and the former Eastern Bloc. Although in the shorter-term some of that can be attributed to credit cycles, the long-run trend is still clearly up, growing by many multiples, and is commensurate with wealth creation in those economies.