I really like this analysis back when it was 15, hammerhead!
I believe that there will be a a longer term "understanding" that is already in the works. The Chinese need to begin the process of inflating their currency and they know it. Part of their own inflation problem is their own currency. I think that they will slowly begin to allow their currency to rise against the dollar with market rates being reached in 5 or so years. This will decrease the cost of dollar denominated goods and services, stimulating higher levels of domestic consumption and start to even out the balance of trade issues. It will slowly devalue existing dollar assets, but very, very slowly. It will also help to reflate the US economy as demand for our products increases and the export engine revs up even more. Any marginal increase in the cost of Chinese goods will largely be offset by productivity increases in China and lower cost of commodities & energy,, so we won't see any major inflation as a result either.
This is very true. Luckily, I believe we are no where near to an inflationary environment and, in fact, are still experiencing deflation in a number of sectors. There is no demand-based inflation today. The only inflation is push inflation, based on either external demand issues such as commodities or inflation in the health & education sector - both due to excessive government participation in these sectors. Educational inflation is largely due to gross negligence and incompetence coupled with it being a government sponsored monopoly. Health is due to the the governments refusal so far to "level the playing field" and force lower costs and competition through tort reform, patent reform, portability, cross-state purchasing, etc. There is no excuse for the cost of our system to be 80-90% higher than the rest of the industrialized world.
These inflations act more as a tax on the population. They have to make a choice between health care, eduction and basic consumption. That is why there is no pricing power for most products. Add in unemployment, asset deflation and minimal economic growth and we're a long way from any demand-based inflation.
Brace, I don't know if you are short, but if you are I advise covering ASAP.
You should post my TA is a Success.
Being based on probability theory it is necessarily wrong sometimes,
but my success rate is better than Casinos and Insurance companies.
YGE is very subject to unexpected news, rumors, etc. that make my methods less reliable, but except for such work OK.
And you are right about clocks- that is why you are (occasionally but rarely) right.
Good luck to all.