Single Post Display - MarketTicker Forums


	Detailed market commentary at The Market Ticker and Ticker Classics (The Year 2011 In Review) Donations accepted; we offer GOLD ACCESS for enhanced privileges. T-Shirts, caps, coffee mugs? Click here. BlogTalkRadio - Mondays at 3:30 Central - Yes, TickerGuy has a radio show (kinda) RSS available

MarketTicker Forums Single Post Display (Show in context)

User: Not logged on

User Info	Gov's next reaction to this mess; entered at 2007-12-02 03:42:18
Bishie Posts: 448 Registered: 2007-11-01 Washington, DC	I don't see the same future actually. I expect a Hillary election so I expect: 1) Higher taxes on capital gains (20%) 2) A scaling back in our war in Iraq but deployment of our troops elsewhere perhaps Darfur. 3) Huge expansion of government but not military. She has committed to getting rid of 500,000 military contractors (it's on her web site) 4) Big changes to bankruptcy laws. Now for the macro picture 1) Stock and real estate prices will fall 2) Gold and oil prices will fall 3) The fed will move to 0% then quantitative easing 4) I think Saudi Arabia and China will be forced to revalue or delink (look at HIBOR right now it is LOW). I strongly believe Saudi Arabia would prefer to do a 20% devaluation and maintain reserves in $ over changing to a currency basket. This would allow the $ to remain the currency for oil but devalue the dollar against the riyal. Saudi Arabia has big defense ties to the US...switching to a currency basket is probably not in their interest. If Saudi Arabia did a 20% devaluation then China followed suit that would ease pressure on the $/euro and $/sterling. So the dollar would rise against the euro and sterling and fall against the renimbi and Gulf currencies. Inflation would rise in the US and fall in the Middle East on this. 70% of goods in Walmart are from China so a 20% devaluation in the $ vs renimbi would be massively inflationary to J6P. 4) As a result of 0% interest rates and quantitative easing the US $ will become a carry trade currency and slowly lose value against higher yielding currencies like the Yen following the 1989 crash. 2007-12-02 03:42:18