Generational Dynamics
Fourth Turning Forum Archive


Popular links:
Generational Dynamics Web Site
Generational Dynamics Forum
Fourth Turning Archive home page
New Fourth Turning Forum

Thread: Financial Crisis - Page 13







Post#301 at 12-28-2001 01:29 PM by Brian Rush [at California joined Jul 2001 #posts 12,392]
---
12-28-2001, 01:29 PM #301
Join Date
Jul 2001
Location
California
Posts
12,392

Dave, interesting question. I'll have a go.


Succession stages =
1) first wave succession period (pioneer species) =
2) understory succession period (slow growers emerge from below) =
3) waste accumulation period =
4) fire =

1. Human species evolves, spreads throughout the world with foraging/hunting economy and informal political organization (what I call the "Pre-Civilized Paradigm") until it occupies all available hunting/foraging grounds and can no longer expand in this way.


2. Development of agriculture, building of civilization, with monarchical politics and organized religion (what I call the "Classical Civilized Paradigm") and spreads or conquers using this method until almost all the world is civilized.


3. The printing press, scientific method, the industrial revolution, the explosion of human population and the magnification of ecological damage, the development of market-driven industrial economies and politics based on the democratic national republic.


4. The crisis of resources, global economics, and war that forces us into the structures I call the "Advanced Civilized Paradigm." This is likely to take more than one saeculum.


The parallel isn't exact, because after the fire, the growth recurs and the fire becomes cyclic in the forest. I don't anticipate that happening in human society.


I'm not sure I can do social parallels for the energy cycle or the carbon and water cycles, although obviously those cycles are important themselves to us.







Post#302 at 12-28-2001 01:41 PM by enjolras [at Santa Barbara, CA joined Sep 2001 #posts 174]
---
12-28-2001, 01:41 PM #302
Join Date
Sep 2001
Location
Santa Barbara, CA
Posts
174

On 2001-12-28 10:20, Brian Rush wrote:
Enjolras:


no, i don't think i am. so let's just leave it at that, ok?

No, I'm not willing to leave it at that. I also have to say that you're not only mistaken, but also childish, petty, needlessly obscure, and obnoxious. You've characterized this as a Nomad affectation by comparing it to the poet Cummings (or cummings), but it bears a much greater resemblance to stuff that Boomers would do back in our college days just to be rude in what we thought were cute ways.


Of course, if you insist on being all those things, there's really nothing anyone can do to stop you.


your reasoning is extremely linear when everything around us suggests just the opposite.

Even the cyclic phenomena we observe have linear mechanisms underlying them; none exists as a primary cause. But that seems to be what you want your economic cycles to stand as, a primary cause. The generational cycle, for instance, has technological and social progress as its driving mechanism, sideswiped by human tendencies to conservatism which produce the rhythmic advance-stop activity which produces the generations and the Turnings.


It's the same way in physics, too. Take the motion of an orbiting satellite. That is properly described as the interaction of two linear forces, the gravitational pull toward the center of the earth and the momentum of the satellite itself. One moves the satellite down, the other moves it sideways, and the combination of the two marks a circle (or more commonly an elipse).


What is the linear mechanism underlying your economic cycles? There needs to be one, or more than one.


it is just as likely that solutions to the problems you describe could be discovered as it is for those problems to grow out of control.

Fifty years ago -- maybe even twenty years ago -- that statement would have been true. Today, it is not. Some of the problems I described are already out of control, and to solve the others, time is growing very short indeed.


your theory, or whatever you call it, can not be tested.

Of course it can; just wait ten years and look and see. It will either be proven entirely correct, proven entirely incorrect, or proven to require modification.


i can tell you haven't really had a lot of experience with markets

I can tell you haven't really had a lot of experience with manners.


But I already knew that.


You're wrong again, incidentally.


all you have is just more ivory tower academic theorizing which can not be proven or disproven

Translation: "I don't know how to answer the objections you raised because they refer to scientific method, of which I am woefully ignorant, and so I will dismiss your ideas in such a way that I can justify ignoring them to myself."


Your privilege, of course.
good grief...all this sturm and drang just because i won't acquiesce to your wishes to change a writing style on a message board that has nothing at all to do with the content of my postings...could YOU possibly be any more childish? sounds a great deal like the proverbial pot calling the kettle black!

and just what have your experiences with markets been? please enlighten me.

my challenge to you is very simple. create a workable model that can be tested in real time and be judged on whether or not it makes money or not? that is the ultimate test. i may disagree with some of mike alexander's conclusions but at least he has done just that by creating a model which can be tested on historical data and then tested in real time to see if it holds up. you have done nothing of the sort. all you have done is put forth what, at best, would be lively cocktail party banter and little more.

i don't list any "primary causes" for the cycles that i outline because they really are of no interest to me. what is of interest to me is can the information stand up to testing and does it hold up in real time by producing REAL, TANGIBLE results. i am far more interested in the "what" than i am the "why" and am content to let others spend their days researching the causes. in the meantime i will reap the rewards of knowing that these patterns have occurred, are occurring, and are likely to occur again.

show how your ideas have and can produce some real monetary results and then we might actually have something worth discussing.




<font size=-1>[ This Message was edited by: enjolras on 2001-12-28 10:58 ]</font>







Post#303 at 12-28-2001 01:49 PM by Brian Rush [at California joined Jul 2001 #posts 12,392]
---
12-28-2001, 01:49 PM #303
Join Date
Jul 2001
Location
California
Posts
12,392

Enjolras:


my challenge to you is very simple. create a workable model that can be tested in real time and be judged on whether or not it makes money or not?

I don't believe that can be done. I am not saying I have such a model that will work consistently. I am saying that you do not.


i don't list any "primary causes" for the cycles that i outline because they really are of no interest to me.

And that, in my opinion, is a serious shortcoming. They should be. It is the lack of such an identified cause that makes your model the equivalent of tea-leaf reading.

<font size=-1>[ This Message was edited by: Brian Rush on 2001-12-28 10:50 ]</font>







Post#304 at 12-28-2001 02:00 PM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,502]
---
12-28-2001, 02:00 PM #304
Join Date
Jul 2001
Location
Kalamazoo MI
Posts
4,502

enjolras, I am not sure how testable your model is. You have not offered specific criteria on which to judge its success or failure, as I have done.

For example, from what I understand from your prediction, an investor who bought an S&P500 index fund in August 2000 will do OK over the following decade, just as would an investor who bought in August 1987. Although both investors would experience short-term losses, in ten years time their return would be quite good, much better than the money market alternative. My model says that only the 1987 investor would do well.

This sort of prediction is relevant because many of us have few choices in our 401K. I basically have a choice an S&P500 index fund, and an income fund (like a money market in that principal does not flucutate--but usually gives a higher yield) that is currently paying about 6%. Based on your model I would stay invested up to around 2010. My model suggests that I should spend the 2000's in the income fund.

My actually strategy is to practice a dynamic alloaction strategy with an increased stock exposure when the market is in the lower end of a broad trading range and a reduced allocation when in the upper. It is based on the notion that a "buy-and-hold" investment in money markets made in 2000 will outperform the stock index see: http://www.safehaven.com/Editorials/Editorial052601.htm

Since I wrote the article I bought one more time, and was very close to another buy, but it didn't quite get there (it is hard to buy spike bottoms with mutual funds since you don't know what the closing price is going to be).

If the market goes significantly below its 9/21 low, which it certainly can do (or not) do, I'll buy at least one more time, and more times if it goes low enough. If the market goes up I'll sell as shown in the article. If it does neither I'll do nothing.

This is an example of I mean by a real-life test. You have not provided such a demonstration, in real time, of your method. The article was written in May. At that time I truly believed the spring bottom would hold. But my method only had me 50% in stocks. It didn't hold, and now I'm 60% in stocks. A year from now I could be completely out of stocks--major rally :smile: or 70% 80%, 90% or even 100% in stocks--major collapse :sad: Mostly likely will be no change.







Post#305 at 12-28-2001 02:15 PM by enjolras [at Santa Barbara, CA joined Sep 2001 #posts 174]
---
12-28-2001, 02:15 PM #305
Join Date
Sep 2001
Location
Santa Barbara, CA
Posts
174

On 2001-12-28 10:49, Brian Rush wrote:
Enjolras:


my challenge to you is very simple. create a workable model that can be tested in real time and be judged on whether or not it makes money or not?

I don't believe that can be done. I am not saying I have such a model that will work consistently. I am saying that you do not.


i don't list any "primary causes" for the cycles that i outline because they really are of no interest to me.

And that, in my opinion, is a serious shortcoming. They should be. It is the lack of such an identified cause that makes your model the equivalent of tea-leaf reading.

<font size=-1>[ This Message was edited by: Brian Rush on 2001-12-28 10:50 ]</font>
of course it can be done. mike alexander has created a model that can be tested both historically and in real time. so have i. so have many others. go ye and do likewise if you want to have a truly intelligent discussion on the matter.

the model i have outlined on here has been successfully used in real time since 1985. i have used it for the last 15 years in my money management and economic consulting business to correctly forecast the crash of 1987, the giant bull move in bonds that followed, the likely outcome of the gulf war and the attendant moves in crude oil and gold, that there would be a long bull move that would be led by technology beginning after the recession after the gulf war. and i also correctly forecasted the beginning of a bear market in 2000-2001 as the lull period in the middle of the boom. i am on record on all this with real results, various clients, with students who attended a series of lectures that i gave on this subject back in 1988, in a paper on the subject that i wrote back in 1993, and in radio interviews that i have periodically given over the last 16 years, and all of these forecasts have been based on the model i have outlined on here.

i did not say there were not any primary causes for what causes my model to work. i am just not interested in them at the expense of not using useful knowledge simply because i don't have all the reasons why it works. in my business that is often referred to as the "paralysis of analysis." it is sufficient that it has worked, is working, and has so far shown me no reason to doubt that it will continue to work.







Post#306 at 12-28-2001 02:32 PM by enjolras [at Santa Barbara, CA joined Sep 2001 #posts 174]
---
12-28-2001, 02:32 PM #306
Join Date
Sep 2001
Location
Santa Barbara, CA
Posts
174

On 2001-12-28 11:00, Mike Alexander '59 wrote:
enjolras, I am not sure how testable your model is. You have not offered specific criteria on which to judge its success or failure, as I have done.

For example, from what I understand from your prediction, an investor who bought an S&P500 index fund in August 2000 will do OK over the following decade, just as would an investor who bought in August 1987. Although both investors would experience short-term losses, in ten years time their return would be quite good, much better than the money market alternative. My model says that only the 1987 investor would do well.

This sort of prediction is relevant because many of us have few choices in our 401K. I basically have a choice an S&P500 index fund, and an income fund (like a money market in that principal does not flucutate--but usually gives a higher yield) that is currently paying about 6%. Based on your model I would stay invested up to around 2010. My model suggests that I should spend the 2000's in the income fund.

My actually strategy is to practice a dynamic alloaction strategy with an increased stock exposure when the market is in the lower end of a broad trading range and a reduced allocation when in the upper. It is based on the notion that a "buy-and-hold" investment in money markets made in 2000 will outperform the stock index see: http://www.safehaven.com/Editorials/Editorial052601.htm

Since I wrote the article I bought one more time, and was very close to another buy, but it didn't quite get there (it is hard to buy spike bottoms with mutual funds since you don't know what the closing price is going to be).

If the market goes significantly below its 9/21 low, which it certainly can do (or not) do, I'll buy at least one more time, and more times if it goes low enough. If the market goes up I'll sell as shown in the article. If it does neither I'll do nothing.

This is an example of I mean by a real-life test. You have not provided such a demonstration, in real time, of your method. The article was written in May. At that time I truly believed the spring bottom would hold. But my method only had me 50% in stocks. It didn't hold, and now I'm 60% in stocks. A year from now I could be completely out of stocks--major rally :smile: or 70% 80%, 90% or even 100% in stocks--major collapse :sad: Mostly likely will be no change.
mike,

i recommended to all that would listen in october of 2000 that we were likely entering the bear period that normally occurs in the middle of the boom stage and that it would likely be accentuated by an overcontraction by the fed over the lack of any harm coming out of y2k. i recommended re-entry into the market in april and october of this year. for a long term investor that would mean, if my model holds up, they should hold tight until probably in the 2009-2013 time frame when the next stage should get underway. as far as someone's 401K goes, my advice would have been to go into an income fund back in october of 2000 and then back to being fully invested in april and october of this year with plans to hold that investment for the next 7-10 years. if such an investment in the S&P 500 in april of 2001 outperforms money market returns then i will consider it a success.

my recommendation to someone who bought after the 87 crash, as i described in an earlier post, was also to reduce stock holdings as we got closer to the stage 2 popular war and increase exposure to oil and gold. i can give specific dates if you wish. then, after the recession following that war, to then substantially increase equity holdings with an emphasis on technology, particularly small caps. then in october of 2000 my recommendation was to sharply reduce stock holdings in anticipation of the mid-boom bear.

i am happy to put the model to the test mike. i have been doing it regularly for a long time now. we'll see what happens next. good luck.

by the way mike, the income fund you mention that is available with your 401-k, if it yields around 6% currently it must be primarily invested in long term bonds and that is an area that has significant principal risk at this time. in fact, long term treasuries have already seen a sizable principal decline just since mid november.




<font size=-1>[ This Message was edited by: enjolras on 2001-12-28 12:25 ]</font>

<font size=-1>[ This Message was edited by: enjolras on 2001-12-28 12:31 ]</font>







Post#307 at 12-28-2001 04:03 PM by Brian Rush [at California joined Jul 2001 #posts 12,392]
---
12-28-2001, 04:03 PM #307
Join Date
Jul 2001
Location
California
Posts
12,392

Enjolras:


of course it can be done. mike alexander has created a model that can be tested both historically and in real time. so have i.

You're right. What I meant to say was, I don't believe such a model can be created that, over time, will pass the test. That is particularly true if, like the one you have suggested, it is purely empirical, derived solely from past performance of the market, and does not take into account causative factors outside the market. Any successes you have had with it in the past are almost pure accident, easily disrupted by factors you have failed to consider. Mike's model will, I believe, prove more correct than yours in the short term, but there are factors he fails to consider as well. And there are factors, no doubt, that I would fail to include if I were to try.


Since I believe the task to be impossible, I have no interest in attempting it.







Post#308 at 12-28-2001 04:29 PM by Brian Rush [at California joined Jul 2001 #posts 12,392]
---
12-28-2001, 04:29 PM #308
Join Date
Jul 2001
Location
California
Posts
12,392

To be more specific.


A predictive model of stock market performance based on the market record itself will, at best, prove functional until an unpredicted change occurs in the rules governing the economy and/or the market itself. Such changes are not driven by the market, and therefore the performance of the market in the past cannot be used to predict them.


One example has already been observed, namely the change in monetary base from the gold standard to the Federal Reserve system which put us on an inflationary spiral rather than a deflationary one. That had absolutely nothing to do with the stock market, and could not have been predicted on the basis of past market behavior, but it was very significant in determining the behavior of the market after the change.


Another change was the complex of new legislation in response to the Great Depression, which resulted both in the elevation of the economy to a higher plane of overall performance, and in a lasting reduction in severity of recessions.


A third was the assumption of superpower status by the U.S. after World War II, which made defense stocks a far better investment than they were before that transition.


A fourth was the oil embargo of the 1970s, which caused a significant economic downturn and damage which lasted until the effect of responsive efficiency improvement kicked in during the early 1980s.


A fifth is the ongoing globalization of the economy, which is reducing the effectiveness of the Depression-era legislation by removing much economic activity from the authority of the governments of the advanced democracies.


A sixth is, or will be, the collision with natural resource limits.


A seventh is, or will be, the developing global war, now in its early stages.


None of these things could have been predicted by a model based on stock-market cycles, and all of them are important to the market's performance.


This sort of consideration is why I believe the task is impossible in the long term, although in the short term, provided that short term doesn't happen to straddle such a change point, it can perhaps be done.







Post#309 at 12-28-2001 05:02 PM by enjolras [at Santa Barbara, CA joined Sep 2001 #posts 174]
---
12-28-2001, 05:02 PM #309
Join Date
Sep 2001
Location
Santa Barbara, CA
Posts
174

On 2001-12-28 13:29, Brian Rush wrote:
To be more specific.


A predictive model of stock market performance based on the market record itself will, at best, prove functional until an unpredicted change occurs in the rules governing the economy and/or the market itself. Such changes are not driven by the market, and therefore the performance of the market in the past cannot be used to predict them.


One example has already been observed, namely the change in monetary base from the gold standard to the Federal Reserve system which put us on an inflationary spiral rather than a deflationary one. That had absolutely nothing to do with the stock market, and could not have been predicted on the basis of past market behavior, but it was very significant in determining the behavior of the market after the change.


Another change was the complex of new legislation in response to the Great Depression, which resulted both in the elevation of the economy to a higher plane of overall performance, and in a lasting reduction in severity of recessions.


A third was the assumption of superpower status by the U.S. after World War II, which made defense stocks a far better investment than they were before that transition.


A fourth was the oil embargo of the 1970s, which caused a significant economic downturn and damage which lasted until the effect of responsive efficiency improvement kicked in during the early 1980s.


A fifth is the ongoing globalization of the economy, which is reducing the effectiveness of the Depression-era legislation by removing much economic activity from the authority of the governments of the advanced democracies.


A sixth is, or will be, the collision with natural resource limits.


A seventh is, or will be, the developing global war, now in its early stages.


None of these things could have been predicted by a model based on stock-market cycles, and all of them are important to the market's performance.


This sort of consideration is why I believe the task is impossible in the long term, although in the short term, provided that short term doesn't happen to straddle such a change point, it can perhaps be done.
virtually every "change" you have mentioned here fits within the pattern that i have outlined for you repeatedly now.

1. degersdorff's work concerning long wave cycles of inflation and disinflation called for an end to a long disinflationary cycle in the 1930s and the beginning of a long inflationary cycle at that point. this was accentuated and made even more powerful by the removal of the gold standard, the closing of the gold window, and the massive worldwide growth in public spending. this was not a prediction based on past stock market behavior but was based on past price behavior and had a direct effect on how stock prices performed.

2. the legislation in the aftermath of the great depression is typical of the efforts made by government in a stage 1 monetary expansion phase to infuse the economy with liquidity. this too has occurred in similar and predictable fashion in the past.

3. defense stocks have always fluctuated based on the outlook for their own respective businesses so i don't see that this has much of a bearing on the question at hand. but they do perform better as we approach war time which has occurred with a regular periodicity of 18-22 years for the past couple of centuries and which the foundation for the study of cycles found was actually reliable going back thousands of years.

4. the oil embargo, while not specifically predictable, occurred after the peak cycle war that was vietnam and produced inflation which is exactly what the environment is supposed to be like during this stage. again, the event may not have been predictable but its likely results were.

the rest are more of your unverifiable and untestable ruminations which, as i said before, may make for some really interesting party chit chat, and may or may not come to pass, but won't add a penny to my or anyone else's net worth. but all of the aforementioned events were very predictable based on past cyclical patterns.

as for my past success in predicting and warning anyone who will listen about significant upcoming market and economic events being an "accident", well, i will take that kind of accident any day of the week. and i will be sure to pass along to all the scores of other professional investors and money managers that i know who have been around for a couple of decades now, some more, that all of their success is directly attributable to "pure accident" according to the wisdom of mr. brian rush.

there is no doubt that developing a workable model to predict future market and economic turning points is a daunting task at which most fail, but falling back on the "accident" argument, or the "it won't work in the long run" argument, are the same lame excuses that academics have been using for decades to justify their inability to perform under real world conditions.



<font size=-1>[ This Message was edited by: enjolras on 2001-12-28 14:07 ]</font>

<font size=-1>[ This Message was edited by: enjolras on 2001-12-28 14:38 ]</font>

<font size=-1>[ This Message was edited by: enjolras on 2001-12-28 14:44 ]</font>







Post#310 at 12-28-2001 05:31 PM by Dave'71 [at joined Sep 2001 #posts 175]
---
12-28-2001, 05:31 PM #310
Join Date
Sep 2001
Posts
175

Brian Rush wrote: "The parallel isn't exact, because after the fire, the growth recurs and the fire becomes cyclic in the forest. I don't anticipate that happening in human society."

I agree that this cycle comes once; and interestingly, I believe the economy to be the greatest of the fire cycle (ever look at a image of earth at night? The fire is raging all over the earth.) But I believe that a new energy input will emerge, from an entirely different source. Unlike oil or even the sun, this source will be eternal.







Post#311 at 12-28-2001 07:23 PM by Crispy '59 [at joined Sep 2001 #posts 87]
---
12-28-2001, 07:23 PM #311
Join Date
Sep 2001
Posts
87

On 2001-12-28 11:00, Mike Alexander '59 A year from now I could be completely out of stocks--major rally :smile: or 70% 80%, 90% or even 100% in stocks--major collapse :sad: Mostly likely will be no change.
Mike Alexander, Why do you have the happy and sad faces? My understanding of your model is that as long as the market doesn't break through your trading range ceiling or floor, you'd be indifferent at worst and better off at best with volatility in the stock index.







Post#312 at 12-29-2001 07:11 PM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,502]
---
12-29-2001, 07:11 PM #312
Join Date
Jul 2001
Location
Kalamazoo MI
Posts
4,502

Crispy: The methodology I use is designed to produce a *long-term* return greater than either the stock fund or the income fund by itself. In the short run it almost always underperforms one or the other, sometimes severely.

So if the market rallys and I can sell my 60% stock position off I'll be happy because I'll have gotten a 15% return for the four years following March 1998. Even if the market keeps going up after I sell it I will *still* have made a good return and I won't have lost anything. On the other hand if the market tanks and I become fully invested I'll feel sad because by net worth will shrink substantially due to the 60% stock position I have now that will drop. Of course in time the market should recover and I should do well in the long run, but this is only a belief until it happens. And it *could* take much longer than I'd like to wait. I won't feel happy about my 401K performance until it does. This is the reason for the smiley/frowny faces.

Note: I do not let my emotions or what I *think* the market will do affect my investment actions. The actions are all decided upon months in advance, and then executed if and when the approximate target levels should be seen.

enjolras: the income fund is like a money market fund in that declines in principal never occur. It is not a bond fund since its principal does not rise when rates decline or fall when rates rise. The yield it pays rises and falls with long-term rates, but hasn't fallen below 6% as of yet. It invests in asset-backed securities, mostly mortgages. I'm not sure how they do what they do. All I know was that in 1989 it was paying 11%, by 1994 this had fallen to 7% and after 1997 it was paying about 6%, where it has stayed.







Post#313 at 12-29-2001 08:09 PM by enjolras [at Santa Barbara, CA joined Sep 2001 #posts 174]
---
12-29-2001, 08:09 PM #313
Join Date
Sep 2001
Location
Santa Barbara, CA
Posts
174

mike,

that sounds like it could be a GIC (guaranteed investment contract) where the principal is guaranteed by an insurance company with an interest rate floor, or some similar financial instrument guaranteed by another similar financial institution. but i really would look a little deeper into that because at the moment 30 year treasuries are yielding less than 6% and yields are rising. to get that kind of return currently they could be in corporates or possibly even junk bonds or are going out pretty far into the future to get it, thus taking more risk with the principal than is being revealed to you.

the bottom line is that you may find you are taking a lot more risk in that income fund than you think you are. just be careful.



<font size=-1>[ This Message was edited by: enjolras on 2001-12-29 17:10 ]</font>







Post#314 at 12-30-2001 11:25 AM by Virgil K. Saari [at '49er, north of the Mesabi Mountains joined Jun 2001 #posts 7,835]
---
12-30-2001, 11:25 AM #314
Join Date
Jun 2001
Location
'49er, north of the Mesabi Mountains
Posts
7,835

Generic money from the generic empire. Ugly rules!







Post#315 at 12-30-2001 01:03 PM by Chris Loyd '82 [at Land of no Zones joined Jul 2001 #posts 402]
---
12-30-2001, 01:03 PM #315
Join Date
Jul 2001
Location
Land of no Zones
Posts
402

Hey, US money looks rather monochromatic, I think. In any case, I'll be touching real Euros this May and June. Here's a mini-topic for a mini-discussion: what country has (or had), in your opinion, the best-looking currency?







Post#316 at 12-30-2001 09:18 PM by Virgil K. Saari [at '49er, north of the Mesabi Mountains joined Jun 2001 #posts 7,835]
---
12-30-2001, 09:18 PM #316
Join Date
Jun 2001
Location
'49er, north of the Mesabi Mountains
Posts
7,835








Post#317 at 12-31-2001 02:43 PM by Mr. Reed [at Intersection of History joined Jun 2001 #posts 4,376]
---
12-31-2001, 02:43 PM #317
Join Date
Jun 2001
Location
Intersection of History
Posts
4,376

How will the introduction of the Euro impact the global economy?
"The urge to dream, and the will to enable it is fundamental to being human and have coincided with what it is to be American." -- Neil deGrasse Tyson
intp '82er







Post#318 at 01-01-2002 12:31 PM by [at joined #posts ]
---
01-01-2002, 12:31 PM #318
Guest

Subject: The Euro and the Dollar

The Dollar is presently the world's reserve currency. This means that international transactions take place in terms of dollars. Also foreign governments and corporations like to hold their reserves in dollars. This has created huge demand for the dollar in the face of fantastic amounts of external and internal debt in the United States. (Total Aggregate Debt for the US is now 30 Trillion dollars.)

If some other currency like the Euro were to come along and compete with the Dollar this would mean foreign debt and currency holders would dump Dollars and buy Euros. The Dollar would go down and might crash. (A nation's currency is sort of like stock in a corporation. The more demand there is for it the higher it is against competing currencies.) This would cause the cost of ALL imported goods to skyrocket. The economy is already in bad enough shape, this would not be a good thing.

Militating against all this however is the fact that the Euro is just another paper currency like the Dollar and is not gold backed. The European central bankers are just as treacherous as Al Greenspan. There may or may not be any great advantage in holding Euros over the Dollar.

As with all things economic nobody knows we'll just have to wait and see.







Post#319 at 01-04-2002 01:57 AM by Mr. Reed [at Intersection of History joined Jun 2001 #posts 4,376]
---
01-04-2002, 01:57 AM #319
Join Date
Jun 2001
Location
Intersection of History
Posts
4,376

Japan is in an economic depression.

http://www.aei.org/eo/eo13626.htm

"The urge to dream, and the will to enable it is fundamental to being human and have coincided with what it is to be American." -- Neil deGrasse Tyson
intp '82er







Post#320 at 01-04-2002 09:44 PM by [at joined #posts ]
---
01-04-2002, 09:44 PM #320
Guest

Subject: Unhappy New Year!

I think that 2002 will be a pivotal year. The 30's began in 1929 with the Crash. The 40's began in 1941 with Pearl Harbor. The 50's began in 1953 with the end of the Korean War. The 60's began in 1964 after the Kennedy assasination. The 70's began in 1973 with the Oil Shock. The 80's began in 1982 with the end of the '81 Recession. And the 90's began in 1992 with the election of Bill Clinton. Notice that each Half Era or Half Turning lasts about ten years or eleven at most. Ten years after Bill Clinton's election is this year.

You can't have a Fourth Turning without economic pain. It's the only thing that affects everyone and alters their behavior. These people who are bidding up the Stock Market in anticipation of a V shaped recovery or even a U shaped recovery are going to be disappointed this year I think. I wouldn't be suprised if the Market continues to decline overall and that unemployment continues to increase (December's numbers came in today and they weren't good). An L shaped recovery (no recovery at all) is a real possibility.

Economic weakness will cause increased unemployment and political turmoil just like it did in the 30's. Don't be surprised if we have to abandon our role as the world's policeman in the coming years. We have troops all over the globe right now (incredibly we still have troops in Japan and Germany 57 years after the armistace!).
Soon we may have to bring them home in order to save money. This will leave an opening for aggressive foreign powers to flex their muscles.

World War III or a Civil War here at home will be a real possibility.







Post#321 at 01-04-2002 11:04 PM by zilch [at joined Nov 2001 #posts 3,491]
---
01-04-2002, 11:04 PM #321
Join Date
Nov 2001
Posts
3,491





Robert = Chicken Little


I'll let Mr. Reed slide... he's too young to know the difference. :smile:











Post#322 at 01-05-2002 12:20 PM by Croakmore [at The hazardous reefs of Silentium joined Nov 2001 #posts 2,426]
---
01-05-2002, 12:20 PM #322
Join Date
Nov 2001
Location
The hazardous reefs of Silentium
Posts
2,426


Not so fast, Lamb of God. You?re pecking on the tadpoles again. If young Robert is Chicken Little, then what do you call your own bedfellow, Patrick Buchanan? He sleeps with you, doesn?t he? Breathes the same rarified air? Hates Hillary more than dog poop? Doesn?t he? PB makes Robert look more like Foxy Loxie. Better run right out and buy a copy of ?The Death of the West.?

http://www.theamericancause.org/

PB sees the end of everything when the Euro goes under.








Post#323 at 01-05-2002 05:43 PM by Mikebert [at Kalamazoo MI joined Jul 2001 #posts 4,502]
---
01-05-2002, 05:43 PM #323
Join Date
Jul 2001
Location
Kalamazoo MI
Posts
4,502

Croaker, Buchanan and Marc are not politically on the same page. My understanding is that Marc is a conservative Bush Republican. He is not liberal on any issue that I can think of.

Buchanan is liberal on certain issues (e.g. he was anti-NAFTA), just as Stonewall is liberal on some things (he is anti-Patriot Act). If my perceptions are correct, I would say that Brian Rush and Marc Lamb are almost exactly polar opposites on the political landscape.







Post#324 at 01-05-2002 06:21 PM by Croakmore [at The hazardous reefs of Silentium joined Nov 2001 #posts 2,426]
---
01-05-2002, 06:21 PM #324
Join Date
Nov 2001
Location
The hazardous reefs of Silentium
Posts
2,426

Mike--

OK, OK, Marc's not such a bad guy. I knew that. But is Buchanan a liberal? Not in my pond! Have you forgotton Goldwater? The only difference between them is by degrees of $$$ and Jesus.

RE: ?The Death of the West? http://www.theamericancause.org/

Pat Buchanan says something that disturbs me, something that, while I am an old hippie liberal at heart, and while I am a biologist, too, and listen to Darwin more than just about anybody, I justifiably fear the possibilities that arise in PB?s eyes, which divert to the bloodshot right but deserve a look through. This, too, is speculation on the historical process. We like that, don?t we? I see no reason why BP?s views can?t be cranked into the equation.

And what are the parameters? Here in Seattle, last year?s WTO protest was a measurable event. Caught us all by surprise! It was followed by a Marti Gras riot that caused the chief of police to say he never saw in 40 years of service such a violent crowd of vicious youth, and far too many were racially motivated. Kill you soon as look at you! Watching those videos is like watching the WTC go down. Those earlier events seem to have come as harbingers of 911. WTO and WTC don?t differ by much?a word, a letter

The rules have changed. Now, we as a world are fracturing along a line that divides the ?patriots? from the ?globalists.? Is BP wrong? Who can deny much of the world?s tensions and hostilities associate with a fulminating war between the ?patriots??races, religions, believers in shrines, protectors of dirt?and the ?globalists??orderers of the New World, macro-industrialists, lacto-libertarians (sucklers of all the milk and honey from the American frontier, however far that many extend, even if it goes all the way to hell).

I have a grandson who, according to PB, will be 50 when all the really bad stuff happens. I plan to talk to him about it, soon, when he?s 2.








Post#325 at 01-05-2002 09:21 PM by Dave'71 [at joined Sep 2001 #posts 175]
---
01-05-2002, 09:21 PM #325
Join Date
Sep 2001
Posts
175

On 2002-01-05 15:21, Croaker'39 wrote:
...and while I am a biologist, too, and listen to Darwin more than just about anybody...
Ah...just as I suspected...What's your role, Croaker T. Frog, as a biologist in Bremerton? I have many-a biologist friends on the Peninsula. Not that this has anything to do with PB or Financial Crisis. But why not try to make it relate!:

Would you consider yourself a neo-Darwinist or a classical-D? As a classical-D, I suppose suvival would be your no.1 choice as the method of evolution. Likewise, if you were to apply Darwinism to the economy, wouldn't self-oriented survival be the no.1 motivation for economic progression? If so, is free-market capitalism also your economic method of choice?

So, as a Darwinist, how might you apply the concepts of ecology to economic theory? This idea I posed a some posts earlier, I'd be interested to see how you respond.
-----------------------------------------