Comments on: Is the Asian Crash a Precursor or Endpoint? http://cupofcha.com/2008/01/22/is-the-asian-crash-a-precursor-or-endpoint.html This is China Mon, 01 Dec 2008 22:44:13 +0000 http://wordpress.org/?v=2.5.1 By: nanheyangrouchuan http://cupofcha.com/2008/01/22/is-the-asian-crash-a-precursor-or-endpoint.html#comment-445 nanheyangrouchuan Wed, 23 Jan 2008 06:17:21 +0000 http://cupofcha.com/2008/01/22/is-the-asian-crash-a-precursor-or-endpoint.html#comment-445 A good point was made on NPR this afternoon (US time). The 81-82 crash happened during very high interest rates (9-12%) so the Fed had alot of room to move. Not so here, and the US gov't is barred from lending money to businesses and banks at 0% interest. China's success has been due to US and EU consumption. The US consumer is tapped out: no more home equity, can't get refinancing, ARMs resetting, high food and fuel costs and a realization that our depression era relatives were right all along (save, save, save). And someone like Suze Orman is becoming a financial cult figure. Now the problem is spreading to Europe. But this isn't just a US, China, EU, developed or undeveloped problem. This is due to too much paper leveraging paper around the world and non-real wealth being traded electronically. Regardless of politics, the Great Depression can be looked at as "the market", which is as much a system as any system in science, was out of equilibrium. The US, Asian and EU central banks are acting against the market, not with it and they will lose and the entire world must deal with the consequences. A good point was made on NPR this afternoon (US time). The 81-82 crash happened during very high interest rates (9-12%) so the Fed had alot of room to move. Not so here, and the US gov’t is barred from lending money to businesses and banks at 0% interest.

China’s success has been due to US and EU consumption. The US consumer is tapped out: no more home equity, can’t get refinancing, ARMs resetting, high food and fuel costs and a realization that our depression era relatives were right all along (save, save, save). And someone like Suze Orman is becoming a financial cult figure. Now the problem is spreading to Europe.

But this isn’t just a US, China, EU, developed or undeveloped problem. This is due to too much paper leveraging paper around the world and non-real wealth being traded electronically. Regardless of politics, the Great Depression can be looked at as “the market”, which is as much a system as any system in science, was out of equilibrium. The US, Asian and EU central banks are acting against the market, not with it and they will lose and the entire world must deal with the consequences.

]]> By: bobby http://cupofcha.com/2008/01/22/is-the-asian-crash-a-precursor-or-endpoint.html#comment-441 bobby Tue, 22 Jan 2008 15:19:49 +0000 http://cupofcha.com/2008/01/22/is-the-asian-crash-a-precursor-or-endpoint.html#comment-441 Burn baby burn. The US markets have opened now, and not looking too good...even with the big fed cut. Burn baby burn. The US markets have opened now, and not looking too good…even with the big fed cut.

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