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Tony Boeckh On The Consequences Of American Central Planning
Boeckh Investment Letter: Government Policy and the Markets: Prepare For Some Big Changes (pdf)
h/t Paul Kedrosky
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It's too late to return to protectionism. We are in a global market. The only jobs coming back will be in the form of competing jobs with China. $1 an hour might not be realistic but $7.50 will be if the dollar loses enough value.
Lose enough value against what?
The US general environment is way too expensive to allow jobs to come back.
At present times, it is all about preventing more jobs from being outsourced or simply disappear (and a jobless recovery is absolutely not surprising)
"The US general environment is way too expensive to allow jobs to come back."
yeah...just wake me up when Walmart starts hiring lice pickers.....
What's the protein content of lice? are they good fried or chocolate covered?
DavidC
When it comes to trying to salvage something of worth from a hopeless self created death spiral,what China thinks,cares about or gets comes bottom of the list.Should have happened years ago instead of creating a huge industrial monster who will soon start to bully and if necessary consume other nations and their resources in a desperate attempt to unify and rebuild itself after the wheels fall off its industries due to lack of demand by a bankrupt Western World.
this
The USD is toast. Govern yourselves accordingly.
those here who blindly state protectionism is a dead end are blind..
look at the Chinese economy and jobs (a protectionist state with high tariffs) vs free trade USA.. nuf said
You've got that backwards.
The U.S. is known to be the biggest tariff enforcer. Just look at some of the main cases (steel, tires, and now a bill introduced to tariff any country who "devalues" their currency).
As far as I know China doesn't enforce any tariffs and they don't even need to. Why would they import goods when they already produce everything. The only things they import are raw materials which would make no sense to tariff.
financeg <please go to USA treasury dept web site and look up current tariff rates I believe you will find USA ave Tariff rates below 3%..majority of our trading partners Above 20% Tariff rates ..or it was last time I looked into it.. 2 yrs ago. Free trade has been a one way street for USA..and jobs have followed.
You are a nationalist idiot. Actually that's redundant. But whatever, I'm not disputing your data references but China isn't somehow better off than the United States because of import restrictions and other impediments to allowing its citizens to accumulate wealth and raise their standard of living. Everything made in China is subsidized through either the currency peg, government-determined input prices, or just straight up corruption and like all government interventions it's not sustainable. Watch how far their protectionist shield gets them when western demand dries up. Currency pegs don't help your consumers at home.
So I present you with data and you give back
opinion. Nationalism is a rational response to
an attack on a countries people or wealth.
IF you do not agree that the USA has been under constant economic warfare with major cooperation from our own elites.. we do not live in the same world.
Your assumptions about tariffs and nationalism may be a result of years of what used to be called brain washing and today is called higher eduction..try thinking out side the world view created by those who control big banks the
elite if you will.. I may very well be an idiot but you are much more dangerous a useful tool of those that will enslave the masses.
Double poste
Pdf link doesn't work.
Here you go:
http://www.boeckhinvestmentletter.com/
Anyone know how much QE this market has priced in?
$7 trillion? Not counting POMO's and other sneaky obvious daily intervention. And I dont think they can deliver Q/E2 look they just kicked it further down the road till Dec? Q/E hype for hypes sake has pumped markets far as theyre going and tanked the dollar to its fresh lows. If they do deliver Q/E that will effectively be the samurai sword to the neck.
IMHO anyone relying on the gov to "fix" things is TOAST! New ETF: GSG=Gold-Silver-Guns!
Here's another "consequence" of government incompetence:
Corn, beans, wheat -- ALL THREE -- just opened lock limit UP! First time in my trading career I've seen them all limit up the SAME DAY!
Cotton was limit up today, too! And sugar, which has no limit, reached a new record this morning!
What impact will more QE have on food prices?
i just noticed that too. DBA up 5.66% for the day right now. that's some crazy shit.
btw, you already answered your own question in the previous 2 paragraphs. to the moon, alice, to the moon.
All of this talk of $X trillion of QE2 being "baked in" is just wishful thinking. Act accordingly.
CORN ETV up over 11% for the day and counting.
something sneaky this way comes...
The economic recovery is jobless, artificial, and flawed.
So what's not to like?
Inflation at ground level:
My favorite locals bar at the beach now has free ribs on Monday, free tacos on Wed, free chicken or barbeque on Sunday, dollar beer five days a week, and of course, free entertainment. If this is hyper-inflation, I'm lovin' it. The local real estate flacks don't bother to advertise anything other than foreclosures.
These clowns can't even run a printing press. Deflation wins, until the real panic sets in.
And those bars will start closing one by one as they (and you) consume their capital.
Maybe the bond market does have it wrong, the Fed is manipulating it.
How would anyone know? When money is managed, prices are distorted.
Seems like the master plan is to justify more QE at any cost. Distortions that Tony is talking about are going to be there for a while. The reality is that the US can pretty much do whatever it wants, and the Chinese watch this all pay out in horror as they're caught between a rock and a hard place.
Chinese watch this all pay out in horror as they're caught between a rock and a hard place.
EndQuote
Don't know about being caught. Gotta remember they have solars!! Thems the future!!
Not sure I agree Leo.
I think they're playing a (dangerous) game of bluff. If they keep on saying that they stand ready to QE2, if things get better then they don't need to. And that's what I think they're banking on - the market will play up any bad news on the basis that QE2 is there.
Why else, on the basis of figures that have hardly been inspiring today, is the (stock) market back up in the green?
The only(!) fly in the ointment is that if things DON'T go the way the Fed is expecting, mayhem will ensue.
DavidC
(Emphasis mine.)
I wasn't speifically seeking confirmation for my puny biases, but there it is.
Holding physical is like an out of the money call option on the system collapsing. Gold prices are increasing (in part, in my opinion) because it becomes more expensive to insure against this event as the probability of this event increases.
Paper (currency) paper (bonds) everywhere and not a one to eat!
Interesting take, but there are many ways to do that. Easiest way is to have a big mortgage on something that will hold relative value, like farm land.
I think the power of gold is that it is both durable and fungible. PMs are the only truly durable commodities.
The downside is that some of us know about tungsten and pyrite;).
Gold's weakness is similar to diamonds. In a real crunch, valuation becomes less, not more certain, because the market is fragmented, and it's hard to prove authenticity, but we're probably all working too hard at this.
Thanks Tyler for another "big picture" article.
I've been reading Zero Hedge for a few weeks now. A lot of the discussion centers around the fact that we have 2 fat tails to deal with: deflation at one end and rampant inflation on the other. It's impossible to say which is more likely, but we are definitely seeing an increased probability of either.
The new normal is that there's less of normal.
rookie cynic,
Welcome!
One or the other...or stagflation, a combination of the two, monetary inflation with asset deflation.
DavidC
Agreed. Housing deflates and commodities inflate. It's a fizzy, bubblicious foam with a bad aftertaste.
Hooray for American Central Planning! I defy anyone to cite a nation that has successfully industrialized without protectionism and some form of national banking. To take some recent historical cases - Japan and S. Korea after WWII. Tariffs, subsidies, regulations, a banking system coordinated with the treasury - the result? Japan is a world leader in a number of high tech industries, having overtaken us in some notable categories like autos and many electronics divisions. Japan's economic policies were modelled after the then most robust economy - the USA; too bad we don't follow our own model anymore.
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