Some Comments on Investing Today

BioBOOM Op/Ed: We found this funny yet enlightening dialog from JAGJR on ClearStation. Although its not Biotech related it has some good thoughts regarding investing in today's climate in general.

Today's quiz:

OK, kids...once again I stand before you willing to expose my enormous ignorance (so what else is new?)...

First premise: in broad terms, if interest rates rise beyond a certain threshold (and there is probably a range of opinions about what that threshold might be), the US economy (particularly housing, consuming and stocks--and I guess bond prices as well, eh?) goes into
the toilet...

Second premise: if the US consumers, monumental pigs that we are, go belly up, Japan, China, India, OPEC, and anybody else who mainly depends on our consumption to remain afloat goes down with us...

Third premise: one way to retard the rise in interest rates is for others to keep buying US treasuries and increasing dollar reserves, even though that is probably going to lead to a death by a thousand cuts as the dollar inevitably declines due to the massive debt being incurred by the twin deficits (spending and trade)....

Fourth premise: the US consumer's appetite for conspicuous consumption (and therefore, debt) is unquenchable, and will only stop when the punchbowl of "free" (low interest) money/debt is taken away or our stomachs explode, whichever comes first....

Fifth premise: the US government's determination to avoid pissing off the voter with hard choices like increased taxes and/or reduced programs is legend, and not likely to change anytime soon...

So the question becomes: given all of the above, how is it all gonna play out?

It would seem to me that only continued low interest rates can allow this dance to go on, and once inflation can no longer be explained
away or lyingly denied, that's all she wrote.....

can interest rates be held down indefinitely?

Best...

the Village Idiot

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