--- In OptionClub@yahoogro
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> The basic premise of Dent's study is that the baby boom generation has driven growth in the economy in various sectors in a very predictable pattern. Now, we are at the end of the baby boom,s peak spending years and fundamental changes to the U.S. economy will be the result. Real estate prices are predicted to fall 40 to 60%. The stock market will sustain another assault bringing it down to 3800 to 5000 level.
>
You mean in the next little while? If so I find that very hard to believe.
All of these "predictions" are based on the premise that the baby boomers are going to matter in the future.
While many will say, "hey they do", I say stop being provincial! My sister lives in Ecuador, brother lives in Russia, works in Kazakstan, mother lives in British Columbia, and I live in Switzerland. And from what I see the global economy is going to move into second gear.
In fact this rise in commodity prices is what I am think will be the catalyst for the next bull run. Yes we in the developed world will slow down in spending, consumption, what have you. But in what one used to call the "developed world" things are moving forward.
Oh will there be inflation? Gee, whiz, ask somebody who lives in India, China, Russia, South America if there is inflation? Inflation already existed in these countries! But this inflation is a rift that is equalizing the "developing world" with the "Western world". What people I think forget is that the price discrepancies that existed around 2000 has to be closed.
I feel the following will happen:
1) The higher priced countries have slower growth, and their living index stops.
2) The higher priced countries have a weakening currency (eg USD). This will make those people living in the weakening country more competitive (Japan, and Germany used this trick ALL the time to boost their economies).
3) It is the global players that will profit from this and bring jobs to the higher priced countries (eg McDonalds, Yum, Ford, John Deere, Harley Davidson, Boeing, etc)
As silly as this sounds, but the future of the developed nations lies in a stereotypical picture of an Indian riding a Hog towards the Taj Mahal. If you can picture that, then I think we can all picture a bullish global economy.
> I followed that advice for most of the 1990's. Unfortunately, I didn't keep his forecasts in mind during the past 8 or 9 years, resulting in bad decision making.
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Here is a thing one needs to remember on those that forecast. You only need to keep saying the same thing over and over again, then you will have a moment in time when you will appear brilliant!!!
> However, I know that there are always two sides to every trade. I'm just hoping I can be on the right side of the trading opportunities that will present themselves in the next few years.
>
Fair enough...
Christian Gross
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