Sent: Wednesday, March 15, 2006 4:03 PM
Subject: THE PIPER IS COMING AND WANTS TO BE PAID. YOU WELL PREPARED FOR FINANCIAL RECKONING DAY?
Herald Tribune, March 13th, 2006. A few tea leaves to read.
Investing (pg.15), by Matthew Lynn, ‘Failing vision for Oracle of Omaha?’
‘Nobody can argue about (Warren) Buffett’s track record. Many investors have made money sporadically, but almost nobody has done so as consistently as Buffett. You do not get to be theworld’s most respected investor without HAVING A FEEL FOR HOW THE MARKETS ARE MOVING.’ (emphasis mine)
Economic Outlook (pg.15). by Simon Kennedy. ‘Huge U.S. trade gap is hot button for G-10.’
PARIS: ‘The U.S current-account deficit….reached a record 6.5 percent of gross domestic product in the first quarter of 2005, and annual figures scheduled for release by the Commerce Department on Tuesday are set to show it EXCEEDED $800 BILLION! FOR THE FIRST TIME LAST YEAR.
The trade deficit….widened to a record $68.5 BILLION! IN JANUARY! THAT MEANS THE UNITED STATES MUST ATTRACT $2.1 BILLION OF FOREIGN CASH DAILY!!! TO PLUG THE GAPS.
Toward the end of his tenure, (Alan) Greenspan argued that “At some point foreign investors will balk at a growing concentration of claims against U.S. residents”–
AND THERE’S MORE:
“For homeowners spending their equity, the party MAY (?) be over,” be Matthew Benjamin.
WASHINGTON: ‘U.S. homeowners…pulled a record $279 BILLION! in CASH! out of their houses last year through refinancing and home-equity BORROWING.
This year, home-equity extraction is expected to drop 50 percent….
Incomes and credit-card borrowing are NOT rising enough to compensate, meaning U.S. consumer spending will slow, holding back economic growth in the U.S.
“We’ve been sustaining consumption by taking money out of housing,” Joseph Stiglitz, a professor at Columbia University and recipient of the 2001 Nobel prize in economics, said. As home borrowing cools, “we will not be able to maintain the increases in consumption that we need to sustain growth at 3 or 4 percent.”‘
HERE’S WHAT I THINK:
Inflation is coming down the pike as sure as g_d made little green apples. GUESS WHAT THESAVINGS RATE HAS BEEN FOR THE LAST FIVE MONTHS IN AMERICA? Answer is below. What’s your guess?
Record deficits, record red ink in Washington, China and India poised to clean our clock and then some. WAIT TILL THE JAPANESE AND/OR CHINESE DECIDE TO PULL THE PLUG AND WANT TO BE PAID THE DEBT THEY HOLD.
You borrow a buck from me, then I ‘own you’ till you pay me back.
YOU BORROW A MILLION DOLLARS FROM ME?
YOU OWN ME UNTIL I GET PAID BACK. Think about it!!
The Japanese and Chinese own us. And this party can’t last forever. Tax cuts, a $400 BILLION Afghanistan / Iraq War bill—$30 billion per month, $100,000 per minute!!!!!!!!!!!!!
This can’t go on folks. No way. And governments have often been successful at paying off debt with ‘funny money’ //// read: INFLATION.
Remember during periods of inflation cash is trash. Hard assets, investments tied to inflation, real estate bought ‘smartly’.
Today I’ve got half my assets in the USA–Fidelity Select Medical Equipment & Fidelity Software, two areas I think where the USA will still have an edge.
Bought Med. Equip. after Blue Cross paid Columbia Presbyterian Hospital $50,000 for my two stents and a 43 hour sojourn there. SOMEBODY IS MAKING A LOT OF MONEY.
Both bought Aug. 1st, 2005. Med. Equip. +2%, Software + 13%.
Other half of portfolio was invested Dec. 8th, 2005.
Equal amounts into five Fidelity funds after about an hour at the Investor Center on Madison Ave. and 76th St., across the street from the Carlyle Hotel where both Jack and Bobby had many trysts—their father owed the joint!
Here are my five picks and the per annum return since I bought them about three months ago, all Fidelity (toll free number from France: 0800 90 10 43):
International Discovery– +43%
China Region– +32%
Capital Appreciation– +23%
Global Balanced– +16%
That’s all folks. Buy low, sell high.
THE SAVINGS RATE THE PAST FIVE MONTHS HAS BEEN NEGATIVE……………PEOPLE ARE SPENDING MORE THAN THEY ARE EARNING. READ THAT AGAIN……… you’ve seen this once before in your lifetime? He who fails to remember………….
‘Want less!’, Wendell Berry, poet & farmer.
‘What goes around, comes around.’
‘We must learn to be still, and still moving.’ T.S. Eliot