Wednesday, September 19, 2007

the lost decade ahead?

in the wake of the rate cut, I really fear we'reheaded in the same direction as latin america 25-30years ago. when commodities like wheat, oil and gold are at highs and the dollar is plunging, I just can'tbe happy to see rates go lower. I think people in theUS vastly underestimate the rest of the world's patience for our errors. with credit investors, once something like the lack of transparency in subprime happens, they will start to ask questions about everything else.

in the process, the new story globally becomes "look how messed up the USA is." our primacy in the world allowed us to remain the benchmark for global ratesfor a long time. those days seem to be finally closing. when china revalues the yuan AND holds theolympics, our country is certain to lose luster. throwin what could be a very uninspiring presidential election, with washington continuing with business asusual, and there's really nothing to be positiveabout. -- except that the fed just cut rate. that really is the only thing going for this market right now. at the end of it all, the USA is going to weaken as a credit. we have a lot of unfixed problems from the last 70 years. is it just time in the cycle for us to be brazil for a decade or two?

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