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No question, in the past, the deficits were not lethal.....
all I am saying is this time, it could be different.
The booming 90's provided the huge revenue tax dollars to fund an
ever-growing government...
at local, state, and national levels.
Now we are "stuck" with this huge behemoth called "government"....and with
an increased demand for $$$ and a decreased supply, the outlook for matching
revenues with expenses is poor.....
unless either government is cut-back (reduced demand) or supply is increased
(higher taxes).
Can anyone tell me which is going to happen ?
I don't think either one.
Potentially the government's appetite for funds <may> crowd-out the
corporate sector resulting in higher interest rates.....and higher cost of
doing business....resulting in reduced profits...and reduced economic
growth.
Under this scenario, I can see how the stock market could be "flat" for the
next 10 years.
In that case, better follow John Cap's option selling technique if you want
to make any money.
> -----Original Message-----
> From: Jim Johnson [mailto:jejohn@xxxxxxxxxxx]
> Sent: Saturday, December 14, 2002 11:09 PM
> To: Kent Rollins
> Subject: Re[2]: [RT] "feel the panic"....
>
>
> Hello Kent and Mark,
>
> You guys always suck me into these weekend debates. I'm w Kent on
> this one. The deficit issue is red herring. US deficit has been at
> small levels vs GDP in the last 30 years. What's more, national debt
> is a bit misleading as we do not account for national assets--schools,
> highways, various infrastructure. Research shows deficits (within the
> range we have had) have little or no effect on the economy. Witness
> the period 1980 thru 2000--or as I call it the Reagan expansion. He
> was beat up about increasing defense spending, increasing the deficit
> and cutting taxes. the sky was going to fall according to the Dem's.
> Son of gun--the deficit disappeared because of tax receipts at reduced
> rates and the Soviet Union tanked.
>
> On the inflation score, seems to me what we know as inflation is oil.
> In 1973 OPEC stuck it to the world and the cost of everything went up.
>
> It eventually got digested and costs began to increase at acceptable
> rates.
>
>
>
>
> Best regards,
> Jim Johnson mailto:jejohn@xxxxxxxxxxx
>
> --
> Saturday, December 14, 2002, 2:37:13 PM, you wrote:
>
> >> over the DEFLATIONARY
> >> ("Hello, Japan !") PPI numbers coming out of the statistical mills ?
>
> >>Massive inflation is one cost to consider.....because without fiscal
>
> KR> So that's it? It either unrestrained deflation or massive inflation?
> KR> You're not sure which one but you're darned sure it's going
> to be one or the
> KR> other. I guess a moderate inflation environment is out of
> the question.
> KR> Either the Fed is out of ammo or they will have to "print
> money like crazy".
> KR> There's no in between. There's no option like
> KR>
> "print-a-lot-of-money-to-keep-us-from-tipping-into-deflation-and-t
> hen-slow-d
> KR> own-some".
>
> KR> FYI: The debt and deficits have been much higher as a percent
> of GDP than
> KR> they are right now and corporations were able to borrow just fine.
>
> KR> The real danger is consumer debt and the impact that may have
> on the banks
> KR> if the consumers crumble.
>
> KR> Considering that we have had only one depression in the last
> 100 years, the
> KR> odds are that we will not have another one. I don't believe "the
> KR> government" is the solution to very much. But I do believe
> that Greenspan
> KR> understands what levers to pull if things do get too far out
> of whack. And
> KR> I believe the Bush is going to press 100% on more massive tax
> cuts and maybe
> KR> even a major tax system overhaul. Tiny Daschle will do
> everything he can to
> KR> keep our taxes high but my money is on Bush.
>
> KR> But here's what I really want to know: if you believe all
> this doom and
> KR> gloom, what concrete actions are you taking in your personal
> life to prepare
> KR> for them? Seriously. Have you sold you house and loaded up
> on gold? Have
> KR> you cut all your personal debt? Are all your holdings in
> cash right now? I
> KR> want to know how seriously you believe in what you are
> saying, even though
> KR> you're saying two completely opposite things.
>
> KR> Kent
>
>
> KR> ----- Original Message -----
> KR> From: "M. Simms" <prosys@xxxxxxxxxxxxxxxx>
> KR> To: <realtraders@xxxxxxxxxxxxxxx>
> KR> Sent: Saturday, December 14, 2002 1:00 PM
> KR> Subject: RE: [RT] "feel the panic"....
>
>
> KR> So you are confident the government will solve the problem then ?
> KR> Maybe so, but at what cost ?
> KR> Massive inflation is one cost to consider.....because without fiscal
> KR> restraint, deficits will balloon to incredible proportions......and
> KR> corporations will not be able to borrow at a reasonable cost.
> KR> The only course of action remaining will be to print money
> like crazy....
>
>
>
> >> -----Original Message-----
> >> From: Kent Rollins [mailto:kentr@xxxxxxxxxxxxxx]
> >> Sent: Friday, December 13, 2002 10:01 PM
> >> To: realtraders@xxxxxxxxxxxxxxx
> >> Subject: Re: [RT] "feel the panic"....
> >>
> >>
> >> Simms, have you sold all your material goods and moved to a
> shack in the
> >> mountains? We had a real estate crisis in the late 80's too. We
> >> formed the
> >> Resolution Trust Corporation and resolved the problem in a few
> >> years. Japan
> >> is still thinking about getting ready to talk about studying some
> >> suggestions the Americans keep making for one day developing a
> >> plan to begin
> >> to start considering a lunch meeting on their problem. Please tell me
> >> you're living in a shack.
> >>
> >> Kent
> >>
> >>
> >> ----- Original Message -----
> >> From: "M. Simms" <prosys@xxxxxxxxxxxxxxxx>
> >> To: "RealtradersList" <realtraders@xxxxxxxxxxxxxxx>
> >> Sent: Friday, December 13, 2002 4:15 PM
> >> Subject: [RT] "feel the panic"....
> >>
> >>
> >> Couldn't you just "feel" the market getting the wind knocked out
> >> of it today
> >> over the DEFLATIONARY
> >> ("Hello, Japan !") PPI numbers coming out of the statistical mills ?
> >>
> >> Non-healthcare related businesses have no pricing power....
> >> and no volume revenue growth....
> >> all they can do is cut payroll and cut costs.
> >>
> >> Ultimate solution is to cut government spending and reduce government
> >> size....so that taxes can be reduced.
> >>
> >> Yeah, right. NOT IN THIS LIFETIME.
>
>
>
> KR> To unsubscribe from this group, send an email to:
> KR> realtraders-unsubscribe@xxxxxxxxxxxxxxx
>
>
>
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