Posted 21 July 2009 - 01:19 PM
Those who ignore the BIG picture will pay a big price.
Stickan's presentation gets an "A" for presentation, but a "D-" for realism.
The big picture circa July 2009 is the most foreboding I have observed since becoming
an adult 48 years ago. Have you ever seen any one....any country...any family...
any individual...any corporation...any state/county/city government...march to prosperity
by borrowing money AND SPENDING IT FOR CONSUMPTION? If yes, please site some
examples. This years budget deficit is 1.8/13.85 = 13% of GDP. That is unsustainable
by any historical yardstick. Next year looks no better. It is similar to you borrowing 13%
more than you make and spend most of it on non-investment items or consumption. You
will be in bankruptcy court very soon.
There is certainly a strong BULL market coming, but it won't be in US Stocks or European
stocks. It will be in the BRIC's. (Brazil, Russia, India, China). In those countries capitalism
is flourishing. In US it is just the opposite. Cap and Trade will act like cancer on US corporations
since China and India will never go for it. US markets will get no better than minor
bull markets in the next decade. Look for Japan style stock market or worse.
Just study Medicare and you will see what is coming with socialized health care. Another burden
for productive people to carry. Higher taxes are coming which will diminish capital formation for
sure. Have you ever seen capitalism do well with less capital?
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule