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Old 9th November 2006, 03:27 AM
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Re: Lessons to learn from the .mobi saga?

Originally Posted by bwhhisc
Economic collapse sounds pretty heavy duty. Where do you get this forecast from?

Maybe the term is harsh, but a correction is due, only issue is when - next year? year after? or 3 years later?

Of course, the American government can buy time playing with interest rates and reducing taxation to spur spending again, but that will only increase credit based spending, increase debt to income ratio, increase the accumulated trade deficit, jeopardize the US Dollar (via imported inflation), and make the delayed correction even more severe.

A slowed down American economy will in turn cool the Chinese economy sometime later (via reduced imports) and, maybe later trigger a real estate correction - this in turn hits back at other Asian countries that export to China, e.g. South korea, Japan, Australia, South east asia.

India will also be hit as the Indian economy is mostly dependent on America.

With a weakening US Dollar, economies like China and Japan holding onto probably a trillion dollars, will start selling their cache for Gold, adding to the selling pressure on the currency.

Last edited by touchring; 9th November 2006 at 04:13 AM..
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