Gara diskusija par ekonomiku. Angliski

> So how about sharing that trick with those of us who are in a position to play it?

If I truly knew how to time markets I'd be rich. But in general, I think we have a pretty good idea of what is likely to happen going forward:

1. The "past economy" continues to pull back the GDP. We still have mortgage defaults and bankruptcies to clear, and there are still too many people/firms on the precipice. Moreover, we still haven't hit the commercial real estate devaluation that's to come. Essentially, both individual and retail spending is down, and will continue to be down until this clears.

2. To deal with #1, we're likely to get a US$1 trillion stimulus over the first two years of the Obama administration. Let's assume for a moment that it doesn't disintegrate into pet projects and stays focused on the bigger problem. That's likely big enough to swing the US economy away from recession. The question is how much and how fast.

3. If the recovery is anything other than painfully slow, the net result of putting more than US$2 trillion of new currency into circulation in a short period of time is almost certainly going to be inflation. Prices will go up. Just as oil had a precipitous drop, it'll wind back upwards very quickly, too. The problem that the government will have is this: the usual tool to control inflation is interest rates. If the Fed raises interest rates as fast as they need to, it'll stop the recovery in the housing and car industry just as fast as it starts. Thus, I anticipate the Fed to be somewhat slow to raise rates, which means inflation will be higher than we've had for quite some time.

Thus, the game for someone with cash right now is to find undervalued assets and take out loans to purchase them. That sounds very counter intuitive to most people who've been reading the papers and learning that debt is what got us into this problem. But if there is a recovery and it is accompanied by rather high inflation rates, getting debt on an undervalued asset today does two things: (1) it allows you to participate in the re-valuation of the asset; and (2) it means you'll have a low-interest loan you pay back in inflated dollars down the line.

The trick is the timing. The most interesting asset to purchase this way is real estate. But has (or when will) it hit bottom yet? There are the dangers that the proposed stimulus isn't enough, that the stimulus gets misdirected, that assets still haven't gotten undervalued, and that inflation is more tightly controlled than expected. All those things change your decision point.

Oh, and one other thing: inflation will deflate the dollar's value. If I had a big storage facility somewhere, I'd be buying up all that US$40 barrels of oil. I think that's an asset that's easily figured out: it really can't/won't go below US$20 a barrel even in a severe, prolonged recession, and it will immediately start a fast upward pricing trend the minute demand returns. Even will full dedication to it, this country probably couldn't build hybrid or electric vehicles fast enough to keep gas prices from returning to US$4 or more levels once the recession is over.