天下縱橫
隨筆而已。不必當真。
正文
The 700 billion bail out package is under votes again in congress. It is alway enlightening to see how twisted things are in the world while a few have comprehension of the consequences.
America is a giant, a giant carries heavy debt burdens. Our life is built on defict spending, borrow from others to live a fancy life. Yet, we believe this life style will forever last.
Now we have a 770 drop in the Wall Street, suddenly, many are crying that the bail out package is necessary to restore the confidence. Confindence has been lost only for those leveraged who fear a deflationary depression will wipe them out. Confidence remains for those who live within their means and have savings and investments.
What we failed to see is that 700 billion and plus a lot more is an added burden on the giant who already suffocates from the heanvy debts, by now, 11 trillion dollars and growing. Our GDP is only 13 trillion, soon enough, the debts will overwhelme the GDP, not to mention the 518 trillions derivatives circling around the world. People would say, that is common. My net debts including my mortgage is way over my income. I still live well. Again people failed to understand that they lifes are in the mercy hand of their employer that feed them, if they lose their jobs, they are gone along with the McMansions.
Same applies to the US. Its knees are weak because of heavy debts. There is no way in the dream US can ever pay off the debts without going through a long painful process. That 700 billion tab is really hard to swallow, yet, people failed to realize that every bit of those bail out package will doom the US along with its reserve currency status.
For now, foreign investors are still willingly share partial burden because of their domestic agenda. Some day, soon, they will say upon USD's continue slides, "we can not share this any more". That is the tipping point for the USD and US economy. The tipping point is getting closer every day as the bail out package getting approval.
In next two to five years, we will hit the tipping point. By then, dumping USD will happen so fast that in no time foreign exchange control will be enforced and USD will tank along with economy and over leverage consumers. So you think that 770 point drop is bad? Then you have seen nothing yet. By then, a 3000 point drop in a single day is entirely possible.
Closer, it is getting real closer..... For those overleveraged, deleveraging or face the consequences.....
America is a giant, a giant carries heavy debt burdens. Our life is built on defict spending, borrow from others to live a fancy life. Yet, we believe this life style will forever last.
Now we have a 770 drop in the Wall Street, suddenly, many are crying that the bail out package is necessary to restore the confidence. Confindence has been lost only for those leveraged who fear a deflationary depression will wipe them out. Confidence remains for those who live within their means and have savings and investments.
What we failed to see is that 700 billion and plus a lot more is an added burden on the giant who already suffocates from the heanvy debts, by now, 11 trillion dollars and growing. Our GDP is only 13 trillion, soon enough, the debts will overwhelme the GDP, not to mention the 518 trillions derivatives circling around the world. People would say, that is common. My net debts including my mortgage is way over my income. I still live well. Again people failed to understand that they lifes are in the mercy hand of their employer that feed them, if they lose their jobs, they are gone along with the McMansions.
Same applies to the US. Its knees are weak because of heavy debts. There is no way in the dream US can ever pay off the debts without going through a long painful process. That 700 billion tab is really hard to swallow, yet, people failed to realize that every bit of those bail out package will doom the US along with its reserve currency status.
For now, foreign investors are still willingly share partial burden because of their domestic agenda. Some day, soon, they will say upon USD's continue slides, "we can not share this any more". That is the tipping point for the USD and US economy. The tipping point is getting closer every day as the bail out package getting approval.
In next two to five years, we will hit the tipping point. By then, dumping USD will happen so fast that in no time foreign exchange control will be enforced and USD will tank along with economy and over leverage consumers. So you think that 770 point drop is bad? Then you have seen nothing yet. By then, a 3000 point drop in a single day is entirely possible.
Closer, it is getting real closer..... For those overleveraged, deleveraging or face the consequences.....
評論
小白雪
2008-10-15 14:41:25
回複
悄悄話
It seems you predict the market very accurate. What a pity I didn't read it before market crashes! My 401K is all in stock fund and was hit pretty hard :( Feel bad... Luckily, I'm still young, in the middle of 30s and still get time to correct it. Could you advise how to invest 401K at current market and in the long run? Thank you.
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