Economic Externalities

It's about time someone with a bigger soapbox than I have with this blog discussed economic externalities. If you have 5 minutes, read Jim Jubak's recent MSN article Time for Capitalism to Pay Its Way. It may not offer any investing advice, but I think it is important for understanding the economic/political challenges and changes we face in the 21st century. In addition, it may make you think about what we should be taxing highest - things like gas consumption, polluters, etc., or income?

Jubak is author of The Jubak Picks: 50 Stocks That Will Rebuild Your Wealth & Safeguard Your Future.

Comments

[conceptwizard:]

Investors have been playing this weak-dollar trade for years, diverting more and more dollars into commodities, foreign currencies and foreign stock markets. This is the Third-World way of asset allocation.

Corporations play this game for bigger stakes, borrowing billions in dollars to expand their foreign businesses. As the pound slid in the 1950s and '60s and the British Empire crumbled, the corporations that prospered were the ones that borrowed pounds aggressively in order to expand abroad. Though British equities rose in pound terms, they generally underperformed gold and foreign equities. At the end of empire, the giant sucking sound was from British capital and jobs moving offshore as the pound sank.

Oct 12 10:21 PM