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Interesting piece on the European news about China paying the price for the birth rate policy it initiated in the '80s.

The one child only policy has left them with an extremely aging population. There are not enough younger people to aid their aging parents so the government must step in (uh,oh). Of course, this is contrary to the traditional Chinese culture, but what must be done must be done. Low birth rates in Europe are contributing to the problems in the EU.

Additionally, the policy has left China with a labor imbalance. A fast growing economy with a smaller labor force to meet its needs. The workers are demanding more in wages and the fear is that some manufacturing will leave for Thailand or Vietnam where labor is cheaper.

I hope the Chinese still have a desire to buy U.S. debt.
 
I've read many articles about that Groucho, and because the United States has the most liberal immigration policy, it will ride out the coming demographic changes in man kind the best.

The only reason we've sold China, and Japan debt and to run trade deficits is because it kept and created global demand for the US dollar. That's the entire point of the petro dollar system. US citizens have been and will always be the largest holders of US debt through the fractional reserve banking system. It's how the monetary system works. The dollar ain't goin NO WHERE, and as we're likely heading into a global recession, the world's wealth is starting to flood into the US dollar. I could be wrong and many "experts" like Bill Gross continue to be wrong, but a new treasury bull market could be starting. The same thing happened in 08 with world investors essentially paying the US government to preserve their wealth, but the collapse in 08 was just the start of an even bigger economic crisis that I think is now starting. I hope I'm wrong, but I'm getting very defensive right now.
 
Good points Drew.

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and many "experts" like Bill Gross continue to be wrong


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I worry about our leaders trying to balance the budget way to soon. I also think they "assume" a balanced budget would be better for growth.
 
Originally Posted By: buster
Good points Drew.

Quote:
and many "experts" like Bill Gross continue to be wrong


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I worry about our leaders trying to balance the budget way to soon. I also think they "assume" a balanced budget would be better for growth.


Don't worry, buster. The most dire plan would balance the budget in 30 years.
 
China did it quickly with the one child policy (and it's got other ramifications for world security with a generation of males who statistically will never marry), but we did it letting baby boomers run the show.

Balancing anything is just a play on words. Oz just balanced next year's budget by going deeper into debt this year, bringing forward 3 months of next Financial Year's expenditure.
 
How this debt bubble plays out is going to be a fascinating, yet painful experience I'm afraid. I think, depending on where we are on Friday evening next week, that it has finally popped and the natural course will work itself out. Always has, always will.

Don't fall for any messiah's in the coming years folks.
 
There's an elephant in the room...........or more specifically, a bear, that no one is talking about. Are you guys the least bit worried about a market crash this week? In the short term, even though the market is somewhat oversold, the entire technical pattern is set up for a crash. I wouldn't be as concerned if it wasn't for Facebook's potential to break the tipping point. Those guys couldn't have picked a better moment to shove that sucker down the toilet.

I've charted out just about every tradeable security possible and the precipice is here.
 
Originally Posted By: Drew99GT
There's an elephant in the room...........or more specifically, a bear, that no one is talking about. Are you guys the least bit worried about a market crash this week? In the short term, even though the market is somewhat oversold, the entire technical pattern is set up for a crash. I wouldn't be as concerned if it wasn't for Facebook's potential to break the tipping point. Those guys couldn't have picked a better moment to shove that sucker down the toilet.

I've charted out just about every tradeable security possible and the precipice is here.


Yea, it's possible...

If so, I'm poised to buy lots more, kinda like a kid in a candy store.
 
Originally Posted By: Drew99GT
I've charted out just about every tradeable security possible and the precipice is here.

My largest position is SPXU. If you're a chartist, take a look at the five year S&P 500. It is begging for a retest of 666.
 
Originally Posted By: Drew99GT
How this debt bubble plays out is going to be a fascinating, yet painful experience I'm afraid. I think, depending on where we are on Friday evening next week, that it has finally popped and the natural course will work itself out. Always has, always will.

Don't fall for any messiah's in the coming years folks.


I agree. Most people don't realize though that gov. spending yoy is down.

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From the Daily Treasury Statement. Total Withdrawals (this includes everything: SS, Medicare, Medicaid, Defense, Interest on the debt..now down $433 bln versus the same time last year. That's about 3-percent of GDP. In other words a SUBTRACTION of 3-percent from GDP. A lot of other things must be good to offset this. Personal Consumption, Business Investment and Net Exports all need to post strong gains to keep GDP positive.
 
http://www.cnbc.com/id/47554313

If the dollar and the treasury market were such a problem, at least in the near short to medium term, Bill gross wouldn't be out saying this! He's continually called for an end to the treasury market bull run but it just isn't materializing. YET.
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What happens when it does, because that will mean the world's last safe haven for wealth will be gone. Gold then shoots to the moon? This market is all kinds of messed up.
 
Basically a lot of what we have all been taught in school regarding our monetary system is false. 30+ years of misunderstanding a fundamental aspect of our economy, which directly and indirectly helped shape policy. Which is why we now find ourselves in this position, along with other things too of course. IMO.
 
Originally Posted By: buster

I agree. Most people don't realize though that gov. spending yoy is down.

From the Daily Treasury Statement. Total Withdrawals (this includes everything: SS, Medicare, Medicaid, Defense, Interest on the debt..now down $433 bln versus the same time last year. That's about 3-percent of GDP.


Buster that is a crock-o-crud. Find the May 27 Fact Check from AP. Cooked book accounting at best. Find the article, because I won't post the AP link here for political reasons.

Here's a summary quote at the end of the article:

Quote:
So how does XXXXX measure up?

--A 9.7 percent increase in 2009, much of which is attributable to XXXXX.

--A 7.8 percent increase in 2010, followed by slower spending growth over 2011-13. Much of the slower growth reflects the influence of XXXXXXXcans retaking control of the House and their budget and debt deal last summer with XXXXX. All told, government spending now appears to be growing at an annual rate of roughly 3 percent over the 2010-2013 period, rather than the 0.4 percent claimed by XXXXX and the MarketWatch analysis.
 
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