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I’m buying more EWZ…I don’t care about the imaginary recession

If the liberal media serves as any indicator the end of the world is already imminent. People are losing their jobs to outsourcing, wages are falling, inflation is rising, the market is crashing, housing prices are cratering, food prices are surging, college tuition is ramping, But do I care? Um no I don’t because WE’RE NOT IN A RECESSION. WE ARE NOT IN A BEAR MARKET. The stock market will ONLY GO HIGHER for MANY years to come because we are STILL in the era of economic perpetualism. I’m logging into ETRADE and BUYING more EWZ even if left-wing pessimism and negativity dominates the headlines and the political landscape.

Believe it or not, we are still in a global economic boom. The GDP’s (growth domestic product) of India, China, Brazil are surging at a rate of eight to eleven percent annum, versus the United States GDP growth rate of just a few percent. The overseas demand for US goods and serivces such as sotware (oracle, microsoft), online networking equipment (cisco), online advertising (google), and construction (caterpillar) is insatiable, which directly benefits large cap, globalist exporters.

The falling dollar against currencies such as the Euro directly benefits US exporters. US companies can sell their goods overseas and then convert the revenues back to US dollars, making a huge profit in the process. Also, a falling dollar encourages foreigners to buy good from US companies because their purchasing power increases as their currency keeps rising relative to the dollar. Imagine that a computer costs $600 in US dollars. The Euro is 1.5 times US dollar so that computer would cost roughly 400 Euros. But if the Euro rises to 1.6 against the US dollar that same computer would translate into $640 US dollars in revenue instead of $600. As you can see, falling dollar=more revnues for exporters.

Another example would be if a European has 600 Euros and he decides to buy some US goods, but then the Euro rises from 1.5 to 1.6 against the dollar. He normally would be able to purchase $900 worth of US good ($600*1.5), but with the Euro rising another .10 his purchasing power would be $960 (1.6*$600), an increase of $60 in purchasing power from the falling dollar. As you can see from these examples a falling dollar isn’t all bad but is actually essential to the growth of the US economy. Don’t believe all the isolationist, anti-trade, ’strong dollar’ boo hoo hoo-ers who also revel at the prospect of the US reverting back to gold standard.

Retail sales are still extremely strong because the US consumer still has abundant purchasing power. In fact, retail sales ROSE by three-tenths of a percent in January, versus a forecast of negative growth. Ignore all the credit crunch and subprime losers who disseminate misinformation about the imaginary ‘credit crunch’ or ‘liquidity crisis’. There is neither. Credit is hugely abundant or else consumers wouldn’t be able to max out their credit cards.

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