Thread: Jim Rogers: 100% chance of another 2008 crash

Originally Posted by Landru Guide Us

Not when it comes to describing a complex economy such as ours, no.

Ahh, so in Quantum physics 2+2 does not equal 4?

Irrelevant since governments aren't like people with credit card debt. But in fact, yes, it is a good idea to take on more debt if it's at a lower rate -- and in fact the US can now borrow money at historic lows.

What happens when you borrow at these lower rates yet the amount just continues to climb? Eventually your interest rate can be zero and you will not be able to make the payments as the principle is just to big. Your logic fails rather hard.

Also it makes sense to borrow more money to increase your income -- say by buying a car so you can get a better job by commuting.

This assumes that a car will land you a better job, but I thought governments were not like people...so how does this logic apply?

The only thing simple here is your simplistic attempt to pretend that macroeconomic forces reward thrift. That's silly.

Thrift is always rewarded when the folks who ignored it come begging for help...just ask Germany or China...except they squandered their good fortune to save a failed monetary union...sad really.

Originally Posted by Roon

Ahh, so in Quantum physics 2+2 does not equal 4?

Yeah, just like that.

What happens when you borrow at these lower rates yet the amount just continues to climb?

Simple: the borrowed money goes to productivity, resulting in more jobs, more economic growth, more tax revenues, with which we pay off the debt.

This is of course what we did at the end of WWII.

And it's what every company does if it wants to modernize: it borrows, invests in productivity, pays off the debt and has more profit.

See: 2+2 =4. But in this case it's not four, due to the multiplier effect. It's more like 50.













Eventually your interest rate can be zero and you will not be able to make the payments as the principle is just to big. Your logic fails rather hard.



This assumes that a car will land you a better job, but I thought governments were not like people...so how does this logic apply?




Thrift is always rewarded when the folks who ignored it come begging for help...just ask Germany or China...except they squandered their good fortune to save a failed monetary union...sad really.[/QUOTE]

Originally Posted by DA60

Then why did the dollar index in April was 10% lower then it is now (i.e. the dollar was 10% cheaper) BUT imports in October are actually up 1%?

And why during this April/May time of a cheap greenback - the May trade deficit was the largest since 2008?

And why since the dollar index has risen (i.e. the dollar is more valuable), the trade deficit has fallen sharply...by over 10%?

http://www.marketwatch.com/investing/index/dxy

http://www.census.gov/foreign-trade/balance/c0004.html

Pssst: because the dollar hasn't collapsed like you baggers said it would.

You're arguing against yourself. A 10% decline is not a big deal.

Originally Posted by Landru Guide Us

Pssst: because the dollar hasn't collapsed like you baggers said it would.

You're arguing against yourself. A 10% decline is not a big deal.

So are you saying that a weak dollar does not help exports unless the dollar falls 'a big deal'?

You heard it here folks.

And how low on the dollar index do you call a 'big deal'?


BTW - I am not a Tea Bagger.

Originally Posted by DA60

So are you saying that a weak dollar does not help exports unless the dollar falls 'a big deal'?

You heard it here folks.

And how low on the dollar index do you call a 'big deal'?


BTW - I am not a Tea Bagger.

A weak enough dollar will. Econ 101.

You're the guy who claims the dollar is going to collapse, not me. I'd never say anything so ridiculous.

Originally Posted by Landru Guide Us

A weak enough dollar will. Econ 101.

You're the guy who claims the dollar is going to collapse, not me. I'd never say anything so ridiculous.

How low is 'weak enough'?

Or do you even know?


And where exactly did I say the dollar will 'collapse'?

Originally Posted by DA60

How low is 'weak enough'?

Or do you even know?


And where exactly did I say the dollar will 'collapse'?

According to you the dollar will collapse, so this issue shouldn't bother you at all. When will the dollar collapse again, and how will we know?

Originally Posted by Landru Guide Us

According to you the dollar will collapse, so this issue shouldn't bother you at all. When will the dollar collapse again, and how will we know?

I will ask you again:

How low of a greenback is 'weak enough'?


And where EXACTLY did I say the dollar will 'collapse'?

Originally Posted by DA60

I will ask you again:

How low of a greenback is 'weak enough'?


And where EXACTLY did I say the dollar will 'collapse'?

So the dollar isn't going to collapse? Bacardi thinks it will and I was speaking to him.

As to your "question" the answer is simple: when the dollar is weak enough that manufacturing in the US produces more of a profit to a manufacturer or an investor in any particular other country, then manufacturers in the other countries will move here, or capital will.

Why does this simple thesis mystify you? I thought you were the market evangelist.

Originally Posted by Landru Guide Us

So the dollar isn't going to collapse? Bacardi thinks it will and I was speaking to him.

I think the dollar will definitely fall and probably lose it's reserve currency status eventually.
But 'collapse' (to me) suggests a Zimbabwe/Weimar-type fall - and I don't think it will fall that much anytime soon, if ever.
But bacardi knows more about economics then I do....so....

Next time, don't put words in my mouth.

If you don't know I said it - please don't say I did.

As to your "question" the answer is simple: when the dollar is weak enough that manufacturing in the US produces more of a profit to a manufacturer or an investor in any particular other country, then manufacturers in the other countries will move here, or capital will.

Why does this simple thesis mystify you? I thought you were the market evangelist.

I have NEVER said I was an economic expert...NEVER.


You used the term 'A 10% decline is not a big deal.'.

So...for the third time...how low on the dollar index do you call a 'big deal'?