> Unfortunately, you must have the mindset of a citizen of the planet > rather than a US citizen to make money. > > Since February, I've invested in Canadian currency, Australian currency, > Brazilian currency, international resource producers and gold, silver, > platinum and palladium. > > If I had lived in the Depression, I would have stuffed my mattress > with cash too, because the US was a net creditor to the world. The > dollars buying power increased every day back then. > > Today we need to keep our cash is vehicles which will maintain global > purchasing power.
Why Are Climate Change and Deficit Reduction Considered Mutually Exclusive? [View article]
huangjin - the first part of your comment is beautifully written and I agree that Cap-N-Tax will hurt the economy, but I do not think it will be as drastic.
On Nov 15 01:27 PM huangjin wrote:
> > By itself, the climate change legislation would turn a strong economy > into the 1970s stagflation. Given the current state of the world, > it would lead to a depression.
Very Long-Term Asset Allocation Results [View article]
Thanks for the chart.
It would be nice if the chart had std devs in addition to the return. knowing the reward is great, but without knowing the "risk" it is hard to determine a risk/reward ratio and build an efficient frontier.
Asset Allocation: Is the Old Normal Becoming the New Normal? [View article]
agree wholeheartedly. sometimes classical asset allocation must be thrown out the window in deference to future trends.
On Nov 18 01:28 PM Windsun33 wrote:
> While bonds have traditionally been part of most portfolios, the > interest and risk of bonds now is not the same as it was in many > past downturns - interest rates are lower, and risks are higher.
Asset Allocation: Is the Old Normal Becoming the New Normal? [View article]
agreed
On Nov 18 01:47 PM mna wrote:
> That's the most common view, and it's the wrong one. Assets tend > to outperform after a period of low performance, and vice versa. > So relatively speaking, you should actually be putting more into > stocks (barring any overpowering external macro trends). The results > are born out by research, check out Michael Mauboussin's books, it's > an eye opener.
Asset Allocation: Is the Old Normal Becoming the New Normal? [View article]
Richard Shaw - yours was a superb article, worthy of being bookmarked as a reference source.
The 10-40-50 asset allocation is for the U.S. non-corporate, non-government sector. What is not mentioned is the US Govt. The SSTF is now at 3T in bonds. As well, some of the US Federal Debt is not accounted for, because it is held by Foreign Govts.
When you throw these "bond allocations" into the mix, I wonder how the asset allocation changes?
I suppose the average mix over 45-present wont change that much, because the deficit was never so high, and the SSTF never so high. I am sure todays mix, when Govt borrowing is included, is more heavily skewed towards bonds and now approaches 50% bonds
Banning Derivatives and Other Such Foolishness [View article]
I agree with Tom Armistead. CDSes are insurance contracts. Properly used and regulated, they are a valuable tool. They shouldn't be allowed to propagate willy-nilly, with ten contracts covering the same underlying (Creating moral hazard), nor should they be allowed without a proper insurable interest (which can be broadly defined)
Nor should CDSes be totally outlawed.
Proper tools for proper projects.
On Nov 16 12:00 PM Tom Armistead wrote:
> > CDS are by their nature an insurance transaction, and should be regulated > as such, with a requirment of adequate capital on the part of the > seller and an insurable interest on the part of the buyer. > > You obviously don't have an understanding of insurance or the moral > hazard created by the lack of insurable interest.
Government Spending Binge Weighing on Markets and Consumers [View article]
I am more worried about the stupid behavior for the next 4 years
On Nov 15 10:13 AM Moon Kil Woong wrote:
> I'm glad someone still sees spending as a burden on the economy and > not a blessing. With depleted coffers and the public asking what > comes next after the 2009 stimulus winds down the full impact of > stupid behavior for the last 9 years will come home to roost. > > I miss the good old days of Bush Sr. and Clinton when money was still > money and a budget was still a budget. Things might have not been > grand or glamorous those days, but at least they were stable. My > how the mighty have fallen.
Watching the USD Drop? Here's What You Should Really Be Watching [View article]
Currencies are notoriusly difficult to predict. Soros made his billions by being BOTH smart and lucky.
Emphasizing my point: BOTH smarts and luck.
On Nov 09 12:01 PM Shishir Nigam wrote:
> skwestorange, > > Around 30% of the US national debt is owned by foreign holders, of > which around 24% is held by China. > > The points that you make are all on the mark, but I emphasize that > currency crosses are all about how one economy is doing RELATIVE > to the other in question. Yes the US is doing pretty horribly right > now...but Japan is in a much more worse situation - hence I see the > current lows of the USD-JPY cross as an opportunity. > > For more analysis, check out my blog: youngandinvested.com >
Watching the USD Drop? Here's What You Should Really Be Watching [View article]
the Japanese have been accepting horribly low yields for years. What makes you think that all of the sudden their will be a sudden massive cultural change and that the Japanese will start investing overseas in order to seek higher yields?
On Nov 09 09:16 AM JS Partners wrote:
> > Be advised that although Japanese residents hold a lot of domestic > assets and debt, they are earning next to nothing on their holdings. > This is all OK because there is no incentive to seek yield overseas > because all other central banks have lowered rates. However, once > this changes which is already the case with RBA - then many more > people will begin to sell Yen holdings in order to get a higher percentage > return on their investments. >
Watching the USD Drop? Here's What You Should Really Be Watching [View article]
Shishir - Yes it is worrisome that Japan has a high Debt/GDP ratio.This is cause for some concern. The fact that Japan is a net creditor nation more than outweighs the fact that Japan has a high Debt/GDP ratio.
Still, I would not invest in Japan - not because of high debt/GDP, but because of low yields.
On Nov 09 07:48 AM Shishir Nigam wrote:
> User 143167, > > You make a very good point. Indeed, that is one thing working in > the favour of the Japanese. However, like any government that has > debt more than 100% of GDP, at some point in the near future, they'll > either need to raise taxes or cut spending in order to bring their > budget into somewhat of a balance. And that cannot be good for the > economy at any point. > > Also, as would hold true for any highly indebted organization, the > Japanese government will have to continue selling its debt to parties, > be it external parties outside Japan or Japanese citizens and corporations, > who will want less and less for it just as the government wants more > and more. There will eventually be a tipping point.. > > For more analysis, check out my blog: youngandinvested.com >
Watching the USD Drop? Here's What You Should Really Be Watching [View article]
I agree with User 143167 - The key point is that Japan is a net creditor nation. The US is a net debtor nation. Japan can depreciate its currency and try to inflate away its debt, but that would not solve anything, because most of its debt is owed to itself.
On Nov 09 05:29 AM User 143167 wrote:
> It is Foreign debt to GDP that matters. In Japan's case, most of > its debts are actually owned by Japanese residents. So government > debts will cancel out with the private assets, which makes the Yen > remain stable. In the US, over half of the debts are not held by > US residents, which is the key why the USD should depreciate.
Inflation Under Control, Despite the Rise in Gold [View article]
Good article. The monetary stimulus that has been directed at the problem has been unprecented. Saying the Fed has had an "Easy Money" policy is putting it mildly. It is better to call it a "SUPER Easy Money Policy" The Fed's Super Easy Money Policy has consisted of of an unprecented balooning of the Fed's balance sheet, ZIRP, and Quantitative Easing (Fed's purchases of both T Bonds and MBSes). Despite the Super Easy Money, inflation remains under control.
This is due to high unemployment, restricted bank lending and consumers who refuse to spend.
Once employment returns to normal, banks start lending and the consumer reappears (even to a shadow of previous years levels), then inflationary pressures will resume, unless the Fed promptly and fully reverses it's super Easy Money policy.
How quickly and fully the Fed reverses its policy is the million dollar question (to be more accurate: it is a $2 Trillion dollar Question). Many doubt the Fed will pull back quickly enough, and others doubt that the Fed can reverse all the asset purchases.
This leads to great uncertainty about the times to come.
Bill Gross: Anything But 0.01% [View article]
On Nov 19 06:55 PM yellowhoard wrote:
> Unfortunately, you must have the mindset of a citizen of the planet
> rather than a US citizen to make money.
>
> Since February, I've invested in Canadian currency, Australian currency,
> Brazilian currency, international resource producers and gold, silver,
> platinum and palladium.
>
> If I had lived in the Depression, I would have stuffed my mattress
> with cash too, because the US was a net creditor to the world. The
> dollars buying power increased every day back then.
>
> Today we need to keep our cash is vehicles which will maintain global
> purchasing power.
Why Are Climate Change and Deficit Reduction Considered Mutually Exclusive? [View article]
On Nov 15 01:27 PM huangjin wrote:
>
> By itself, the climate change legislation would turn a strong economy
> into the 1970s stagflation. Given the current state of the world,
> it would lead to a depression.
Very Long-Term Asset Allocation Results [View article]
It would be nice if the chart had std devs in addition to the return. knowing the reward is great, but without knowing the "risk" it is hard to determine a risk/reward ratio and build an efficient frontier.
Asset Allocation: Is the Old Normal Becoming the New Normal? [View article]
On Nov 18 01:28 PM Windsun33 wrote:
> While bonds have traditionally been part of most portfolios, the
> interest and risk of bonds now is not the same as it was in many
> past downturns - interest rates are lower, and risks are higher.
Asset Allocation: Is the Old Normal Becoming the New Normal? [View article]
On Nov 18 01:47 PM mna wrote:
> That's the most common view, and it's the wrong one. Assets tend
> to outperform after a period of low performance, and vice versa.
> So relatively speaking, you should actually be putting more into
> stocks (barring any overpowering external macro trends). The results
> are born out by research, check out Michael Mauboussin's books, it's
> an eye opener.
Asset Allocation: Is the Old Normal Becoming the New Normal? [View article]
The 10-40-50 asset allocation is for the U.S. non-corporate, non-government sector. What is not mentioned is the US Govt. The SSTF is now at 3T in bonds. As well, some of the US Federal Debt is not accounted for, because it is held by Foreign Govts.
When you throw these "bond allocations" into the mix, I wonder how the asset allocation changes?
I suppose the average mix over 45-present wont change that much, because the deficit was never so high, and the SSTF never so high. I am sure todays mix, when Govt borrowing is included, is more heavily skewed towards bonds and now approaches 50% bonds
Banning Derivatives and Other Such Foolishness [View article]
Nor should CDSes be totally outlawed.
Proper tools for proper projects.
On Nov 16 12:00 PM Tom Armistead wrote:
>
> CDS are by their nature an insurance transaction, and should be regulated
> as such, with a requirment of adequate capital on the part of the
> seller and an insurable interest on the part of the buyer.
>
> You obviously don't have an understanding of insurance or the moral
> hazard created by the lack of insurable interest.
Government Spending Binge Weighing on Markets and Consumers [View article]
On Nov 15 10:13 AM Moon Kil Woong wrote:
> I'm glad someone still sees spending as a burden on the economy and
> not a blessing. With depleted coffers and the public asking what
> comes next after the 2009 stimulus winds down the full impact of
> stupid behavior for the last 9 years will come home to roost.
>
> I miss the good old days of Bush Sr. and Clinton when money was still
> money and a budget was still a budget. Things might have not been
> grand or glamorous those days, but at least they were stable. My
> how the mighty have fallen.
Watching the USD Drop? Here's What You Should Really Be Watching [View article]
Emphasizing my point: BOTH smarts and luck.
On Nov 09 12:01 PM Shishir Nigam wrote:
> skwestorange,
>
> Around 30% of the US national debt is owned by foreign holders, of
> which around 24% is held by China.
>
> The points that you make are all on the mark, but I emphasize that
> currency crosses are all about how one economy is doing RELATIVE
> to the other in question. Yes the US is doing pretty horribly right
> now...but Japan is in a much more worse situation - hence I see the
> current lows of the USD-JPY cross as an opportunity.
>
> For more analysis, check out my blog: youngandinvested.com
>
Watching the USD Drop? Here's What You Should Really Be Watching [View article]
On Nov 09 09:16 AM JS Partners wrote:
>
> Be advised that although Japanese residents hold a lot of domestic
> assets and debt, they are earning next to nothing on their holdings.
> This is all OK because there is no incentive to seek yield overseas
> because all other central banks have lowered rates. However, once
> this changes which is already the case with RBA - then many more
> people will begin to sell Yen holdings in order to get a higher percentage
> return on their investments.
>
Watching the USD Drop? Here's What You Should Really Be Watching [View article]
Still, I would not invest in Japan - not because of high debt/GDP, but because of low yields.
On Nov 09 07:48 AM Shishir Nigam wrote:
> User 143167,
>
> You make a very good point. Indeed, that is one thing working in
> the favour of the Japanese. However, like any government that has
> debt more than 100% of GDP, at some point in the near future, they'll
> either need to raise taxes or cut spending in order to bring their
> budget into somewhat of a balance. And that cannot be good for the
> economy at any point.
>
> Also, as would hold true for any highly indebted organization, the
> Japanese government will have to continue selling its debt to parties,
> be it external parties outside Japan or Japanese citizens and corporations,
> who will want less and less for it just as the government wants more
> and more. There will eventually be a tipping point..
>
> For more analysis, check out my blog: youngandinvested.com
>
Watching the USD Drop? Here's What You Should Really Be Watching [View article]
On Nov 09 05:29 AM User 143167 wrote:
> It is Foreign debt to GDP that matters. In Japan's case, most of
> its debts are actually owned by Japanese residents. So government
> debts will cancel out with the private assets, which makes the Yen
> remain stable. In the US, over half of the debts are not held by
> US residents, which is the key why the USD should depreciate.
Inflation Under Control, Despite the Rise in Gold [View article]
The monetary stimulus that has been directed at the problem has been unprecented. Saying the Fed has had an "Easy Money" policy is putting it mildly. It is better to call it a "SUPER Easy Money Policy"
The Fed's Super Easy Money Policy has consisted of of an unprecented balooning of the Fed's balance sheet, ZIRP, and Quantitative Easing (Fed's purchases of both T Bonds and MBSes). Despite the Super Easy Money, inflation remains under control.
This is due to high unemployment, restricted bank lending and consumers who refuse to spend.
Once employment returns to normal, banks start lending and the consumer reappears (even to a shadow of previous years levels), then inflationary pressures will resume, unless the Fed promptly and fully reverses it's super Easy Money policy.
How quickly and fully the Fed reverses its policy is the million dollar question (to be more accurate: it is a $2 Trillion dollar Question). Many doubt the Fed will pull back quickly enough, and others doubt that the Fed can reverse all the asset purchases.
This leads to great uncertainty about the times to come.
Paul Tudor Jones: Gold's Undervalued and Bonds Are a Curve Flattener Play [View article]
One ounce of Gold is worth what it has always been worth: it is worth one ounce of Gold.
It is better to say that one dollar is worth 1/1000, 1/1200 or 1/2400 of an ounce of Gold.
How and When Will the Fed Reverse the Huge Addition to Bank Reserves? [View article]
That's the One Trillion Dollar Question !