Mark Twain claims not to be dead, May 1897Wifred Hahn (SafeHaven) gives his reasons for thinking that, post-bubble-burst, American fundamentals will improve, at least for a while.
Is the US going through a bit of slow-down ... a bit of currency trashing? Yes, of course. It is deserved. But economic adjustments will now occur, feeding through to other world economies. Gradually, the trade (non-energy) deficit will shrink. Once foreign equity markets begin declining significantly in anticipation of a slowing global economy and the USD has put in a bottom, it is possible that a torrent of foreign-invested portfolio capital will return to the US. Some estimates put the value of this foreign investment at over $1.5 trillion (and rising as the US dollar falls.)
From our perch in Canada, the next few months likely present the lowest risk buying opportunity of US dollars in at least a century. US "large-cap" companies with significant overseas operations are also attractive on a relative global basis as these are best able to weather an economic slowdown. America will survive for a few years longer.
6 comments:
Is the US going through a bit of slow-down ... a bit of currency trashing? Yes, of course. It is deserved.
Do you really think so? I've just posted on the CDOs which could start the run.
That was a quote from a Canadian, they're generally nice, laid-back people (in peacetime).
I guess that the current US administration will protect the white-collar perps - maybe even use the Presidential retiring amnesty - and America will clean house when the next President enters the Oval Office. The country has a history of self-renewal when everyone has given up on it.
Thanks for the reminder of the lovely Twain quote.
Mrs Clinton will invade Canada. Whether before or after Venezuela, my crystal ball does not reveal.
DM: ...on her own?
With a cigar clenched firmly between her ... oh, sorry, not a nice image.
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