China’s market volume has peaked which I find interesting. I don’t normally believe charts fortell the future myself.

Here is the Nasdaq going into the bubble.

http://finance.yahoo.com/charts#chart12:symbol=^ixic;range=19910401,20040503;indicator=volume;charttype=line;crosshair=on;logscale=on;source=undefined

I noticed the volume peaked and doesn’t grow anymore. Is this is sign of lack of cash inflow?

Now look at Hang Seng:

http://finance.yahoo.com/charts#chart14:symbol=^hsi;range=5y;indicator=volume;charttype=line;crosshair=on;logscale=on;source=undefined

It’s similar.

Even in the middle case, where US and European GDP growth move from 3.x GDP growth to 1.x, export-dependent markets suffer disproportionately.

All else equal, capital requirements will curtail lending activity in both US and Europe.

Emerging markets could possibly lose either the US or Europe as consumers, but not both.

By my lights, China is the biggest bubble in the history of civilization. 60x from bottom to top, whereas most bubbles tend to run near a factor of 20. Examples: Nasdaq from 300 to 5100. Gold from 35 to 800. Even the South Seas trading company was almost precisely 20.

Conventional wisdom is that they’ll keep it together ahead of the Olympics. Trader instincts say to get short ahead of that.

So, for me, EEV and a touch of FXP.

Why does Japan have no growth in earnings? High costs and high competition.

Look at when Korea started exporting cars at a large volume rate and got accepted by the US. Look at what has happened to the US auto industry during this time period.

As third world countries develop things get worse for other developed countries as business competition increases.

With the auto sector as my previous example now look at the semiconductor and display technology field. Everything has moved from US to Korea and now its expanding in China and others.

By people investing in emerging markets for growth and greed they basically have shot themselves in the foot. By investing in 3rd world nations they have moved these jobs elsewhere by funding many new companies.
The only way US can complete today is in innovation and that is going to be extremely difficult.

I’m long EEV (X2 short emerging markets) because I believe two things can happen:

1) As our US goes down the emergings should follow twice down.
2) US people will realize it’s better to invest in US than other countries to keep jobs here. (unions already do this but I think now many others will follow).

Just build me a good car (product) in the US and I can buy it; Even if it’s slightly more expensive. But don’t build the product in 3rd world say its US made and it happens to be garbage because then I’m just better off buying it from the 3rd world country.

Shows how stupid Americans are if they made his book #1 on the NYTIMES Best seller list!

Gold and/or silver bullion protects you against both, inflation or deflation.

That’s a helluva lot like the infamous Charles Schwab telling those investors on that commercial that ran over and over again ”just relax” in the middle of the Nasdaq crash. Those who listened relaxed their way very nicely into the poorhouse.

I wholeheartedly agree with you, Barry…especially this line “This universe was populated with pollyannas, perma-bulls, overtly political economists, and Wall Street cheerleaders.”….but, I think if you have the courage to write that line, then you must name names like Larry Kudlow who is all of the above and given his show, should be at the top of your list. A shameful shill for the Bush Administration, too.

JJJ

IMHO

Inflation camp = faith camp “Belief in the FED”
Deflation camp = empirical camp “Risng Defaults, tightening base money supply”

M0, M1 = Real Money
M3, Credit = Faith in Repayment

Is the faith justified???