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Re: How to make $315% in six years with low volatility
Bill -
You wrote:
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This is what I remain unable to clearly understand. The equities bubble of the 1990's was a US domestically engineered stock bubble, which spilled over into foreign stock markets but was originally in US assets, due to US credit policies which were then emulated by a few foreign credit markets.
The housing bubble was also a domestically engineered bubble which similarly spilled over into foreign assets.
But any prospective "energy and energy infrastructure" bubble it seems would have to start from domestic US assets - i.e. alt-energy companies, and US based actual energy resources? If it did not start from US domestic assets, then the notion it was emerging as a US FIRE economy bubble becomes open to question. The FIRE economy is a US phenomenon and nowhere is referenced as occurring in direct relation to US FIRE economic impulses in other parts of the world.
If you look around at the bidders globally on energy assets and energy infrastructure, the US effectively is relegated to a secondary (soon to be tertiary!) "owner" of these assets in terms of it's share of the global pie. We "own" a fraction of the overal global energy or it's infrastructure.
How then does a domestically inspired nascent bubble in these asset classes in the US spark a global bubble in them? If it indeed sparks a US bubble in "infrastructure", that's only a US bubble, not a bubble that's echoing throughout the world in these asset classes - unless and until these asset classes undergo a serious demand bid throughout the world which results in their being bid up by countries globally due to increasingly critical global NEED.
Plus America's position as "prime mover" of new global asset bubbles has just undergone some serious degradation in the past seven years. It is not a static percentage of the global pie by any means. Our currency is being repudiated, our market share in many asset categories is shrinking. Therefore for the US to cause another "global" asset bubble it would have to exert it's inflationary effort upon an asset class with some notably tight or solid fundamentals in order to bring the rest of the world along for the new bubble ride as we approach 2010 and move beyond it.
I am unclear how the "US infrastructure bubble" is going to be a bubble on a global scale at all, unless and until the fundamentals of alt-energy, or conventional energy, in fact gain all the attributes of a fundamentally underpinned global bull market - underpinned by their increasingly critical role - and in that case this new asset class bubble would be a hybrid, not a pure "bubble" class at all.
I guess what I'm trying to point out here is that my understanding of the prior "bubble" paradigm as it applied to A) stocks and B) real property, was based on asset classes with no inherent reason to surge to bubble heights other than monetary / loose credit phenomena. Notably, these asset bubbles were borne in America, by means of American domestic assets, and then spread to other parts of the world.
But it appears to me that fitting alt-energy into the next bubble class is introducing an "asset class" with some notably different attributes to stocks and real property in America.
1) Alt energy and energy infrastructure are today rapidly globalising assets or sectors. While US housing and US stocks were wholy owned subsets of the domestic US economy.
2) Stocks and housing in America were by no means "vital" or "essential" assets to the world". US housing if anything was the antithesis of "vital to the world".
3) Alt energy and energy infrastructure are rapidly moving to the forefront as "vital" or "essential" assets to the world. These in effect are not wholly owned subsets of the US economy, but rather are global assets, which will increase in value more closely in proportion to global bids than merely US bids.
Therefore is there not at least a valid argument to be made that if we see soaring prices of alt-energy which seem to validate the notion of an emerging "alt-energy bubble" this bubble is fundamentally unlike the prior two fiat US caused bubbles because it's emerging bid is global, and cannot therefore be reasonably imputed primarily to US FIRE economics?
That's my other perpetual puzzlement. How can US FIRE economics in an era of declining US global economic leadership continue for long to be capable of causing any new global bubbles? I've never understood how US FIRE economics exerts any direct motive force on asset classes which have a fundamental, critical global bid underpinning them. To me the connection seems tenuous. I get increasingly skeptical of the idea that America will have the clout to affect the trajectory of asset classes which emerge as critical to the world, simply because the bid inflating such global essential assets is rapidly outstripping America's share of the whole - and because America is broke and others are holding all the cash to act as prime movers.
With all the cash piles in the BRIC nations and OPEC, and the fact that America's comparative cash pile is rapidly dwindling to "comparatively much smaller" (due to evaporating USD purchasing power and repudiated USD) it seems to me we must defer to all those other countries collective wish or consensus, as to which asset classes will be the next "bubble" - and as the vast majority of those nations dont even have a FIRE economy, those asset classes won't be bubbles at all.
Bill -
You wrote:
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Originally Posted by bill  The feds objective will be to keep the water level in the tea pot just right, not to hot, not to cold, a nice moderate rate of inflation steam until the next bubble is formulated. The fed’s rapid response policy of not allowing deflation at the same time keeping inflation intact is not by accident. If deflation in a certain asset class becomes a concern, implement policy for a more gradual prolong deflation cycle as in real estate. The focus for the next bubble will be energy technology, energy usage and infrastructure to deliver, $100.00 oil demands it and will be used in part as a political launching platform. The reports, analysis, justifications for such projects and politically positioning must be in place prior to launching such cycles. Keep an eye on companies like http://www.wgint.com/about_us/ as one example for detail bubble formulating policy. |
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This is what I remain unable to clearly understand. The equities bubble of the 1990's was a US domestically engineered stock bubble, which spilled over into foreign stock markets but was originally in US assets, due to US credit policies which were then emulated by a few foreign credit markets.
The housing bubble was also a domestically engineered bubble which similarly spilled over into foreign assets.
But any prospective "energy and energy infrastructure" bubble it seems would have to start from domestic US assets - i.e. alt-energy companies, and US based actual energy resources? If it did not start from US domestic assets, then the notion it was emerging as a US FIRE economy bubble becomes open to question. The FIRE economy is a US phenomenon and nowhere is referenced as occurring in direct relation to US FIRE economic impulses in other parts of the world.
If you look around at the bidders globally on energy assets and energy infrastructure, the US effectively is relegated to a secondary (soon to be tertiary!) "owner" of these assets in terms of it's share of the global pie. We "own" a fraction of the overal global energy or it's infrastructure.
How then does a domestically inspired nascent bubble in these asset classes in the US spark a global bubble in them? If it indeed sparks a US bubble in "infrastructure", that's only a US bubble, not a bubble that's echoing throughout the world in these asset classes - unless and until these asset classes undergo a serious demand bid throughout the world which results in their being bid up by countries globally due to increasingly critical global NEED.
Plus America's position as "prime mover" of new global asset bubbles has just undergone some serious degradation in the past seven years. It is not a static percentage of the global pie by any means. Our currency is being repudiated, our market share in many asset categories is shrinking. Therefore for the US to cause another "global" asset bubble it would have to exert it's inflationary effort upon an asset class with some notably tight or solid fundamentals in order to bring the rest of the world along for the new bubble ride as we approach 2010 and move beyond it.
I am unclear how the "US infrastructure bubble" is going to be a bubble on a global scale at all, unless and until the fundamentals of alt-energy, or conventional energy, in fact gain all the attributes of a fundamentally underpinned global bull market - underpinned by their increasingly critical role - and in that case this new asset class bubble would be a hybrid, not a pure "bubble" class at all.
I guess what I'm trying to point out here is that my understanding of the prior "bubble" paradigm as it applied to A) stocks and B) real property, was based on asset classes with no inherent reason to surge to bubble heights other than monetary / loose credit phenomena. Notably, these asset bubbles were borne in America, by means of American domestic assets, and then spread to other parts of the world.
But it appears to me that fitting alt-energy into the next bubble class is introducing an "asset class" with some notably different attributes to stocks and real property in America.
1) Alt energy and energy infrastructure are today rapidly globalising assets or sectors. While US housing and US stocks were wholy owned subsets of the domestic US economy.
2) Stocks and housing in America were by no means "vital" or "essential" assets to the world". US housing if anything was the antithesis of "vital to the world".
3) Alt energy and energy infrastructure are rapidly moving to the forefront as "vital" or "essential" assets to the world. These in effect are not wholly owned subsets of the US economy, but rather are global assets, which will increase in value more closely in proportion to global bids than merely US bids.
Therefore is there not at least a valid argument to be made that if we see soaring prices of alt-energy which seem to validate the notion of an emerging "alt-energy bubble" this bubble is fundamentally unlike the prior two fiat US caused bubbles because it's emerging bid is global, and cannot therefore be reasonably imputed primarily to US FIRE economics?
That's my other perpetual puzzlement. How can US FIRE economics in an era of declining US global economic leadership continue for long to be capable of causing any new global bubbles? I've never understood how US FIRE economics exerts any direct motive force on asset classes which have a fundamental, critical global bid underpinning them. To me the connection seems tenuous. I get increasingly skeptical of the idea that America will have the clout to affect the trajectory of asset classes which emerge as critical to the world, simply because the bid inflating such global essential assets is rapidly outstripping America's share of the whole - and because America is broke and others are holding all the cash to act as prime movers.
With all the cash piles in the BRIC nations and OPEC, and the fact that America's comparative cash pile is rapidly dwindling to "comparatively much smaller" (due to evaporating USD purchasing power and repudiated USD) it seems to me we must defer to all those other countries collective wish or consensus, as to which asset classes will be the next "bubble" - and as the vast majority of those nations dont even have a FIRE economy, those asset classes won't be bubbles at all.
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