I hope you will bear with me today, but I just have to VENT!! Have to. Disaster to my right and disaster to my left and none of it is real!! If all the predictions I read did come true, the world would cease to be for the most part. I just have to get my two cents in here today. And thanks in advance for your forbearance of this agitated old analyst.
It took a long time, but I finally saw several analysts saying what I have been telling you for months. (See my columns of May 7 and Sept. 21 in the MoneyNews.com archives in the Expert's Corner section.)
The dollar's drop is not the "sky is falling" stuff everyone says it is. In fact, this week we finally got the first inkling that the road the dollar has been following is beginning to pay dividends. Did you read that the EU ministers are complaining that the U.S. dollar's fall is hurting their exports and might harm their growth and the U.S. must hike the dollar and quick? Poor babies! Would it make it better if the bad, old U.S. stopped bullying you? Shame on that old U.S.
Ah, gimme a break, as the overused saying goes. The decline of the dollar is long overdue and has been, in this analyst's view, engineered from the start by Bernanke and Co. to finally dish out what has been force-fed to us over the years by all the nations of the world.
Now they know what it feels like to have to compete with a real titan. Finally, the avalanche of wealth that has been roaring out of the U.S. for 25-30 years will be stopped and the flow will begin to reverse. About time, I say! All the lazy, sweatshop robber barons of the world had better take notice, we are mad as hell and we're not going to take it anymore.
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If you want to sell to the U.S., you guys, you better be ready to compete with some of the toughest, hardest dealing, best producers and business people in the world — those home grown right here in the good old U.S.! You see, guys, the playing field, while not yet level, is a whole lot more level than it used to be and the U.S. team is lean, mean, and just aching for a big win!
Yes, yes, I know, you are saying that's all wrong. A weak dollar will bring big inflation to our shores and a huge sell-off of U.S. bonds and terrible suffering to our people when their retirements dissolve right in from of them.
What year were you born? If all that is so true, why have all the nations that have had remarkably weak money the last 25 years been growing like gang-busters, accumulating huge piles of OUR money on profits from exports? And where is all the inflation that was supposed to flatten them?
Come on, take a close look! The biggest violator of all the weak-money, pre-conceived rules is China. Explain that one and don't give me all that baloney about special cases and such. Economic law is the same for everybody. The form of government or level of economic development makes no difference. You just have to be ready to sacrifice and work hard! Look at South Korea if you doubt me on that one!
[Editor's Note: Commodities Are Still in a Bull Market. Get Our Top 6 Recos for the Coming Year.]
And don't throw Zimbabwe in my face, either. You don't legislate economic law like they tried to do. If you don't produce, you fail and, yes, then inflation will eat you alive. But, there is no comparison between the U.S. and such a failed economy.
Look at it like this. Europe has had things easy all these years while our dollar was high. Now, they have to finally really compete, and, folks, we ain't no wusses!! They are facing the big time.
We are the largest single economic entity in the world by far. Take us out of anyone's economic equation and huge panic bells go off. They need us. Let them sell their T-bonds. They need us far more than we need them in this game of economics. And there will be plenty of buyers of those bonds at prices we can live with to absorb even complete sell-offs.
Oh yes, I hear you. The huge sell-off of bonds in August by all those countries, what about that, Whitmore? Yes, I did notice how interest rates jumped in August. Let's see. Oh, yes, less than zero it says here. Come on! They sold out of fear of the unknown subprime problem. Now, that's ancient history and the markets are stabilizing — granted, slowly — but they are stabilizing.
And now let's talk about the donuts part of this column. I told you back in an August column that the commercial paper problem was serious, but so were the folks that ran that business. Do you really think that they would sit by and watch their vital market just fall apart? I told you that they would all get together in a room somewhere and work out the nuts and bolts of how to regain the market's confidence. And they have done just that.
[Editor's Note:Buffett Says This Book Made Him Billions]
The BIG guys are forming a body not unlike the one that ended the savings-and-loan crisis many years ago. Why did they use that model? Cause it worked, that's why! Over hot coffee and likely many donuts, they put it all together, but this time in an international fashion. Never sell smart business people short.
Yes, there are still problems, but good minds are not paralyzed by fear. They are attacking the problems. How do I know that they are making headway? All I have to do is open my SUPER CHART at the end of every business day and see that, to get a major market turnaround, the Dow has to drop below Dow 12,882 (as of Oct. 17) for six consecutive weeks or below the S&P 1,388 for six consecutive weeks. Now, if that were to happen, believe me folks, we would be in trouble, real trouble. But, we are over 1,000 Dow points and nearly 160 S&P points from that event.
Right now, at the end of every business day, the Super Chart is telling me that the people that really count, the investors of the WORLD are saying the markets are STILL QUITE WELL, thank you!! And as long as the Super Chart says that, I will hold fast to my predictions of coming through this period with our country and its economic health in great shape.
Well, my thanks for letting me vent a bit today. I usually don't, as you know, but with predicted disaster to my right and predicted disaster to my left, I just had to once again bring up the unfortunate reality that investors just don't agree with those disaster predictions for now.
Can that change? Of course it can. But I go with what is happening, not what might happen. Reality is always my choice when making a business decision, in fact making any decision. How about you?
Whew!! Feel so much better. Do hope your investing week is a good one. Meantime, you keep in touch. I do! See you next week!
Editor's note:
Buffett Says This Book Made Him Billions
Cash and Banks at Risk? Protect Your Wealth Now.
Commodities Are Still in a Bull Market. Get Our Top 6 Recos for the Coming Year.
