Depression, not recession

08.07.2008

We recommend you to have a look at the video where Martin Hennecke from Tyche group in Hongkong is talking about "depression" and not recession in US and other markets.            



© 2008 Bloomberg.com

Moderator
Martin Hennecke is a Treasury Group Senior from Tyche group in Hongkong, welcome! I just looked at some of your comments and also your market report, that you gave me in advance. You said that you expect »Depression« in USA. We are therefore not repeating your opinion about »recession« but »depression«. So, how seriously can we imagine this?

Henecke
Yes, exactly. So, first »recession« in USA is not a novelty anymore. Everybody, that knows a little about such things, with the exception of Ben Bernanke, comes out of this, that USA already is in recession…

Moderator
Well, technically looked of course no …

Hennecke
Of course, technically looked very much. I think, I don't need manipulation inflation interests for my statements. And if we calculate the interests of BIP's growth, we already are in recession. Because if we consider the real inflationary interest we can see, that the growth isn't so high anymore, as it was assured. Majority of independent analysts speak about recession, even Alan Greenspan, that USA already was in recession. In spite of all this we still have high debts in our system, 53 billions, if all private and public housekeepings would step together, there will be a solution for all this. But we think, that it will be even worse, possible worse as in year 1929. Because USA is in worse condition of debts as at that time.

Moderator
If you're talking about hyper inflation, than we have one good example for this in Zimbabwe. Where here goes primarily about the break of the offer from political causes. In opposition to Weimar republic there were enourmous commitment playings, which grew up from payment for the renewal of 1st world war.

Hennecke
There are more causes and of course between them are also costs of renewal but as a final result this led to enourmous tasks. Debts, which weren't possible to pay, came fully out of control. And if you can imagine today's situation of debts in USA, then you can make similiar conclusion that debts came to such degree, where it is not possible to manage them anymore. And this situation reminds us on Weimar republic and this what now led to these debts is not so important anymore. And now hat FED hardly a chance to decide, even if she was a competent: If she will raise the interests she will kill the economy and this will led to the decline of the dollar. If she will not raise the interests, then she will kill the dollar and the economy at the same time.

Moderator
So, you suggest to all, that they find an assurance with gold and in a way also with silver. You suggest also the use of foodstaff stocks in the case of need. You are not so convinced about the investements in the energy, why this?

Hennecke
Well, because energy is used in one good part of industrial production and in tug of depresion, not just in USA but also in Europe, announces big invasion of inquiery, have the prices go back to the former state. Especially because the picture about the offers is not so clear and not clear at all as it is of gold, for which we can say, that his production is in Spouth Afrika as also in Australia crushed to it's frontier.

Moderator
Peple that sell dollar now to buy euro based on your statements, you dissuade from all this. Why?

Hennecke
Exsactly. The reason is, if we look at Europe, that some of European contries are in worse situation that USA. Let us take for example Spain, that can be the best football player but they have a large deficit of pay balance, that is worse as in USA, and their personal Housing Bubble is wors that american and from all this there is 97% financed for the changeable interests. Or we can took France. France has confessed that she is bankrupt. Or Greece. So, these are no options.. Precious metals are first choice. But as we already mentioned, it is worth to invest in Renmibi and now, when the chinesse' shareholder's market is corecting, we can some of our money also in chinesse shares destine

Moderator
Thank you for the conversation.

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