Russ Winter and Lee Adler talk about the signs of a market turn and a strategy to play it.
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6 Comments
http://wallstreetexaminer.com/paid/rf012010.mp3
points at a html page instead of an mp3 file, I think.
The audio fails.
Downloaded the file, but its 45K and its not an .mp3 file.
Sorry. I posted the article before the audio had finished loading. OK to go now.
Reinhart & Rogoff showed in their paper “800 years of financial folly” that historically, that large govt debt is owed domestically rather than overseas does not notably change the likelyhood of default. Eg Japan with internally owed debt is not much better off just because that debt is domestically owed.
I’m thinking the same thing T. The overseas debt is a much bigger problem if you owe it in a foreign currency, like Argentina’s mistake of owing US$s. In a sense, Greece, Spain and Italy have a similar problem as Argentina because they owe debt in an almost-foreign currency, Euros, which they can’t print. Japan, the Kingdom of UK and USA are not in that pickle. The Euro inventors anticipated that problem and invented the debt/GDP ratio restriction, which they can’t enforce on countries. They will have to put the burden on German taxpayers, or inflate the Euro or both. I doubt they will reduce the Eurozone. Power is at stake.
Similarly, USA is part of the Chinazone. Does China kick USA out when it goes into outrageous debt? No. They just print more Chinese Yuan and absorbed the loss and in return USA absorbed China’s Fannie and Freddie losses.
Anything less civil would be playing rough, like a Viking banker from Iceland.
I was thinking the Euro is not going to act like the good old days of the 1970s hard currencies. So far I have been wrong.
At least China inflation showed up. That is the outcome which makes sense, from a policy of maintaining a Chinazone.