天下縱橫
隨筆而已。不必當真。
正文
The market has experienced several day down turn. Some Wall Street experts are claiming the major down turn is in hand.Is the claim true? Probably not. With increased liquidity injection to the market, through PPT at 600 billion or so, FED is unlikely to allow major market crash.
My belief is market will see another 15% drop and end of year with slight plus, provided if euro sovereigh debt defaults will be contained. But this is the blips in the long term bear market.
Next two years will bring currency crisis to home. For interest payment on US debt will exceed critical 30% of tax revenue. I figured that since US tax revenue stood at 2.19 trillions, 30% will be 660 billion. Last year, treasury paid 386 billion of tax revenue for interest on the debts. This year at 14 trillion and 4% will bring interest payment at 560 billion (14T at 4%) and 2012 would be around 16 T x 4% = 640 billion. After that, it is show stopper.
We could raise tax revenue to decimate the economy, or we could declare debt default to sabatage the USD reserve currency status.
Market will tank and it will bring the economy to the chaos.
Can we raise the interest to firm up dollar now? Well, if that to happen, the government and FED will experience severe deflation that will also put the government tax receipt to nil.
2012-2014, what a dangerous time for the world history.....Call me the bear but I fail to see the light in the horizon.
My belief is market will see another 15% drop and end of year with slight plus, provided if euro sovereigh debt defaults will be contained. But this is the blips in the long term bear market.
Next two years will bring currency crisis to home. For interest payment on US debt will exceed critical 30% of tax revenue. I figured that since US tax revenue stood at 2.19 trillions, 30% will be 660 billion. Last year, treasury paid 386 billion of tax revenue for interest on the debts. This year at 14 trillion and 4% will bring interest payment at 560 billion (14T at 4%) and 2012 would be around 16 T x 4% = 640 billion. After that, it is show stopper.
We could raise tax revenue to decimate the economy, or we could declare debt default to sabatage the USD reserve currency status.
Market will tank and it will bring the economy to the chaos.
Can we raise the interest to firm up dollar now? Well, if that to happen, the government and FED will experience severe deflation that will also put the government tax receipt to nil.
2012-2014, what a dangerous time for the world history.....Call me the bear but I fail to see the light in the horizon.
In any currency crisis, real estate may not gain much because it is denominated in the currency itself. The real estate market is in down spiral and there is no end one can see, thanks for the bubble. Since the rent income itself is based on USD, when currency goes down dramatically, what do you think the real income based on the rent?
In the US, the debts have overwhelmed the system. It is hard to say what will bring in next 10 years. The most likely scenario is hyperinflation which decimates most human wealth. History says, precious metal, certain stocks, arts, land (not rental properties), are likely the best wealth preservers than any other investments.