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Planning to get married in Goa? www.weddingsetcgoa.com Making your 'dream wedding' possible ------------------------------------------------------------------------ ----- Original Message ---- From: Mervyn Lobo <[email protected]> The Govt's removal of the regulations allowed for financial institutions to make gambles that were insane. The sad part of the situation is that those who lobbied the Govt to remove the regulations are the very people who are in charge of the US treasury today. The cherry on the icing is that Obama's adm is unable/unwilling to re-instate the rules that prevent bankers from making insane bets with their depositors money. The situation is going to get a lot worse before it gets better. --- Mervyn, Actually, the banks in the US have become overly cautious now. There is very little lending going on in the real economy, despite the massive bailouts to the banks. Hence while money supply has technically increased ala quantitative easing, it is not really flowing into the economy, which is why we continue to be under deflationary pressure. The reckless lending by the banks has been replaced by reckless lending by the government. In the US, around 80% of the home loans have a "backed by the US govt" stamp on them. We see money being poured into stimulus programs that in my opinion are only bringing in future demand forward, but which do nothing to set up sustainable growth. Of course, the thinking is that the Keynesian approach will help stimulate growth. However the current world wide downturn is not because of a credit crisis, but rather should be labeled as a debt crisis. Debt based stimulation to solve a debt problem amounts to kicking the can further down the road. I for one, question this so called economic recovery, be it in the US or China. I see tepid growth in the US for the next few years and I think China will follow very shortly. The latter is on a govt. induced stimulus high right now, but will it last? I think less export driven economies such as India and Brazil will do better than China over the next few years. ----- Original Message ---- From: Mervyn Lobo <[email protected]> As each day goes by, the countries with sound banking systems have been publically demanding an alternative currency to the dollar. Recently the UN and the IMF joined Russia, China, India and Brazil in this demand. Until an agreement can be reached on this new world currency, there is always the currency that has worked well in times of economic crises. Gold. It hit another record high price today. ---- I would not put all my money in Gold, but it is certainly one of many hedges one should have. Averaged over the last 30 years, Gold has been a loser. A world currency? Huh, I think you have a better chance of wishing for world peace! No pun intended, but there are so many conflicting signs at the moment: Gold is up, the markets are up, which are in conflict with the fact that we are still witnessing deflation and high bond prices. One thing for sure: these are uncertain times indeed. Marlon
