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More Dollar Pain As Europe's Economy Is "Flying"
The race to the economic/currency bottom today is entirely at the expense of the "burgeoning" European economy, and with Spain and Italy being on the verge of a depression, and France having its usual set of problems, it means that somehow Germany is now the greatest economy in the world. The AUD, GBP and JPY are all underperforming, with just the EUR being the beneficiary of the daily USD flaying.
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maybe it's not as much about relative performance of the economies and more about a shift towards the euro as another reserve currency?
'To say of what is that is not, or of what is not that it is, is false; while to say of what is that it is, and of what is not that is not, is true.' -Aristotle
'The greatest part of mankind have no other reason for their opinions than that they are in fashion.' -Samuel Johnson
"A man can get to love shit if his livelihood depends on it, if his happiness is involved." -Henry Miller
'Free your mind.' -Morpheus
Pop-quiz hotshot,
a)Scientists can teleport atoms across a room.
b)Scientists have developed a plasma window.
c)Scientists theorize that a supercharged plasma window combined with a laser curtain and a carbon nanotube screen and an advanced form of photochromatics will create an impenetrable force field.
d)Scientists have created a high-temperature superconductor utilizing a substance called mercury thallium barium calcium copper oxide, which becomes superconducting at 138K (-135C).
e)Scientists theorize that if room-temperature semiconductors can be found we'll have flying cars and trains.
f) Securities such as collaterized debt obligations, pools of fixed-income securities that require complex computer modeling to design and understand are hard if not impossible to value.
Question : Which of the above is science fiction?
Answer : You know the answer.
Although this blogger has a bunch of respect for Taleb I still read the WSJ and Financial Times every day although admittedly only the first and last paragraph of many articles.
Heck I'll even turn the sound on for CNBC between 715 and 815 CST but usually only for Santelli and Cashin.
In Taleb's tome, 'Fooled by Randomness' he describes a mechanism called Wittgenstein's ruler : Unless you have confidence in the ruler's reliability, if you use a ruler to measure a table you may also be using the table to measure the ruler. The less you trust the ruler's reliability (in probability called the prior), the more information you are getting about the ruler and the less about the table.
Substitute ruler for dollar and table for markets and the shadow of the form of the now in vogue, hoocoodanode?,dollar carry trade narrative becomes clearer.
Further substitute confidence for dollar and future for markets and our dilemna is clearer still. To wit : Unless you have confidence in your confidence's reliability, if you use your confidence to measure the future you may also be using the future to measure your confidence. The less you trust your confidence's reliability, the more information you are getting about your confidence and the less about the future.
Although one might suppose the future as being unknown, today's market is predicated on confidence that 'free and easy money and models showing 100% success' are a known unknown.
Bernanke has promised to monetize cows to increase the price of milk; asset classes are moving based on the confidence of how sour that future glass might be.
But there are also unknown unknowns. These are things we do not know we don’t know.
What we do not know we don't know is what the long finger of instability from the Hand will ultimately do to the markets and the economy that are still the home of the brave but alas are now a different land.
What we do not know that we don't know is how the continuing liquidation of Main Street and bifurcation of America will interact with the bankrupt ideology of the rich that had greatly succeeded in drafting the inner monologue of regular folks so that they would vote against their self interests and are trying to do it again.
'In argument, answer your opponent's earnest with a jest and his jest with earnest.' - Leonitus Gorgias
My jest to the Federales' earnestness in defending their strong dollar policy -
Pomp and Happenstance : Can you spot the Nancy Capitalist?
They are killin' Sam.I know it was you Timmy. You broke my heart.
The Oracle at Eccles: At Rally's End or the new Fickle-Down Economy? Though we walk through the Valley of Debt we fear 'No Easing'.
Nancy Capitalists in a Sovereign Democracy that are Hell Bent to seek Rent.
The insouciance of elites and the Antoinette economy ... exhibit thyself to a public that may hiss thee.
The manufacture of contempt : it is only a Great Depression if they say it is.
My earnestness to the Federales' jest of a strong dollar policy -
THEY ARE DESTROYING YOUR STANDARD OF LIVING
Great post, AnonMon. I like the way you think. Lots of great stuff, and great perspective, as well. Sadly, this will go over the heads of 99% of all people walking this planet. I particularly liked the following quote:
It's this mental laziness that allows a handful of people to attain any real power over a given situation, and it all stems from most people being too lazy to think and comprehend for themselves. Taken further, by placating to and tugging on the desires of society is how those people attain those sought-after positions in the first place. In short, society has done (and continues to do) this to itself.
"Although this blogger has a bunch of respect for Taleb I still read the WSJ and Financial Times every day although admittedly only the first and last paragraph of many articles." Same here! Some time ago, I used to go to Marketwatch and would just read the comments for good laughs.
You're presently using room-temperature semiconductors as you are typing your message...
You mean room-temperature superconductors, which we're close to doing (~ -35 degrees C)
Thanks, made the correction.
We do have room-temperature semiconductors... You mean room-temperature superconductors.
But we're close... something like -35 Celcius... or Fahrenheit.
e)Scientists theorize that if room-temperature semiconductors can be found we'll have flying cars and trains.
We do have room-temperature semiconductors... You mean room-temperature superconductors.
But we're close... something like -35 Celcius... or Fahrenheit.
e)Scientists theorize that if room-temperature semiconductors can be found we'll have flying cars and trains.
Aaaah, remember the deutchmark.
Perhaps we shall see it again someday.
German patience is not unlimited.
Seig Heil!!!
that would be deutschmark
germany is greatest economy in the world and real estate in berlin is the cheapest of any western capital city.
True on both counts. Need a roomie/German study partner?
Nice post unscarred. That mental laziness also extends to those who make doomsday preictions but don't have the ability to think far enough ahead to the implications of their prediciton.
The intent of my statement is merely that if society would demand more from leadership, then leadership would be forced to produce better results- at least better than what we've gotten for the past generation or two.
Society has allowed our government to fail us with not only fiscal and economic measures, but also with respect to energy policy, social security, health care/medicare, etc. Given our affinity to buy now, pay later, matched with our unquenching thirst for SUVs, supersized value meals, suburbs, as well as other ancillary spending, we've allowed government to royally fuck us in the ass.
Here's a question: Is the purpose of government to serve the people's interests, or to serve the people's best interests. I find this to be both a fair and intriguing question, because I believe the two to be in direct conflict with each other, as each will provide wildly different results.
To respond directly to your statement, I don't quite understand your perspective. I agree with you that most people do not think beyond the tip of their noses- both the lazy Joe Citizen, as well as the rouge alchemist hatching his latest doomsday prediction.
I think that you have to match the actions that follow the prediction to the person who made the prediction in the first place. Look at John Paulson- his prediction did nothing to keep bankers from continuing to issue bullshit credit derivatives, while his foresight enables he and his investors to profit mightily. Compared with Peter Schiff, who's prediction of a dollar crisis fell on deaf ears as well, found that the only damage inflicted was to himself and his investors, as his short dollar positions got squeezed to hell by the spike in the dollar last fall/winter.
As for the bigger picture, I don't think that doomsday predictions do much to alter the general mindset of society. As AnonMon posted in the quote by Samuel Johnson,
If a doomsday scenario is not in fashion, it's not likely to catch on, and therefore not likely to impact anyone (positively or negatively) beyond those who find the warning credible enough to act on it (for better or for worse).
There are still concerns about some banks in Europe. I think sme of the problems that the US has faced will show up later in Europe. It is likely the dollar will strengthen against the Euro over the next months.
time123
http://invetrics.com