Time's interview with Jim Rogers about the Economy

ok, well have fun with doom and gloom.

 

that didn't stop us from following the path to destruction. america and japan are not very comparable from an economic perspective either.

 

i wish ymc had said that.

you guys are right. it's over. it's all over.

 

the key is the us dollar.......the really good times started rolling in after opec certified the us dollar as world's reserve currency back in '74.......if that status is taken away at some point, by lack of confidence in america or in paper money in general......then we have a problem.......it won't be 'all over', but we won't be able to live beyond our means anymore with endless debt-building......and that includes the gigantic military budget and financing of multiple concurrent wars....

 

I think China will be ok in the sense that it will be able to weather this economic downturn with less pain than some other countries with a huge debt load.

The reason I say this is that most Chinese people have a habit of saving money.

They always think ahead-- 20 or 30 year down the road. If you talk to any
Chinese new moms, they might tell you that they are already planning
their child's college education. They always put away money for rainy days.
Well, these are the rainy days.

Most Chinese people do not like to borrow money. They always pay
cash even for big ticket items. They don't like paying interest to the lenders.
So they don't have mountains of debt to deal with.

As for those people that are out of work from the decline in the export sector,
they still can go back to their villages and continue farming, and I am sure
they have save money for rainy days like this too. It might not be a bad thing. As Jim Roger suggests, farming will be the next big thing in the world instead of money (paper) shuffling.

In times of diffficulties, friends and relatives always try to help each others
in China. it's a cultural thing.

 

excellent post ^^^^^

i fully agree it's all about weathering the storm as you put it, and that china along with a few others is in a much better position to do so....

in a deflating bear market, debt is the ultimate killer

 

I'd just like to point out that the United States produces the most food of any nation in the world.

Go Dwayne and Lebron!

 

Yes but this same trait makes them unlikely to replace what CHina needs most - demand. A super-high savings rate can be as much as a curse as it is a blessing. See Japan.

 

This thread reveals why we are in a recession.

Mr. Rogers understands but hasn't explained anything clearly.

In 1930 the market recovered nicely from the '29 crash encouraging several bear rallies.

Since people didn't understand the nature of debt and speculation bubbles they had no idea that the constriction in the economy was going to last another 10-12 years. Once the bubble corrected the war was a catalyst for a new expansion (about 70 yrs worth).

Looks like it is no different today, once this debt correction is over, the excess standard of living created by debt will be reduced significantly. That is what a correction does.

A bubble is simply an infusion of debt to increase demand, purchasing, consumption etc.

It is never a win to expand an economy or standard of living by debt alone as we have done. This results in having to continually re-finance and increase your borrowing- thus needing more and more debt to survive.

Once lenders either encounter too much default or bad debt; or they lose confidence then they tighten credit and a contraction occurs.

The real game is for the lender to make money.

Bankers and Industrialists at the very top of the financial food chain will be the winners when all this is past.

Here is a link to an article from Feb. 5, 2007 that explained what was going to happen pretty well. Please take a look at their forward thinking due to understanding the fundementals.

DEBT

IMHO understanding fiat currency, central banking and debt is the only way to have any real predictor of long term economic growth or contraction.

 

off topic....


i was curious if you had been killing it lately since u ripped me awhile back for being a piker.

 

Living frugally, responsibly, and living within your means, is that a bad thing ?

who's smart idea that you can spend more than you earn ?

Those people who abused their credit cards, and used their houses as
piggy banks are in real trouble now since they spent the money they don't have.

I could increase my living standard quite a bit too if someone lend me a lot
of money and go out and spend it. But whether I will be able to pay it back
or not is an entirely different matter. The no money down stuff is just insane.

Jim Rogers knows his stuff. He should be the one that's sitting in the White house.

 

Yes. That's good for America.

On the other hand, they are also the biggest food wasters in the world. They are eating way too much than they need to. I hear that Airlines are starting to charge fat passengers more, not to mention the healthcare cost down the road.

I am afraid to ride the elevators these day with fat people in it.
I don't know if those cables are going to hold up.