And so based on this remark I assume you don't care if the dollar is strong or weak? My personal feeling is that when the dollar is weak I get less out of it... *can you feel the sarcasm?
http://money.cnn.com/2007/11/27/markets/sovereign_funds/index.htm?source=yahoo_quote If you buy a 4% treasury bond, and the currency loses 4% a year, you have gained nothing, especially if you are in the middle east and have loans you have to repay in Euros. So, they will begin pumping their spare currency into investments all over the world, which will reduce the demand for treasury bonds. Then we will have to raise rates to sell the bonds, and the MARKET sets long term bond rates, not the federal reserve, which can only affect short term rates. This will make it harder to raise capital to start or expand businesses, hurting US competitiveness in the long run. You must manage your currency conservatively, which the repubs have failed to do the last 7 years, or you must pay the consequences. Our treasury debt has been the worlds reserve currency since WWII. If that changes in a major way, and these Sovereign Wealth Funds seem like a good start on a move away from US treasuries, this will hurt us.
look at this as an investment opportunity by: adding U.S. multinationals to your portfolio. a weaker dollar provides a massive competive advantage to companies like Johnson & Johnson buying mutual funds that invest overseas purchasing gold buying shares of companies that do business only abroad or go buy foreign currencies.
We still lose $177 billion or more a year! Budget surpluses will have to be regained if we are to pay down the unprecedented $9 Trillion National Debt. National Debt Clock
http://www.oregonindependent.com/node/72 This guy, obviously a republican and smart US treasury guy, calls it like I see it also. Bush is running the country in the ground. You can thank him for the $80 a barrel oil, an indirect tax. For the last few years, the republican carpetbaggers have sold snake oil, that the deficits didn't matter. Guess what, they do. They always did. Fiscal responsibility matters. And devaluation of the currency hurts, see oil, housing, health care, college tuition, food. Gold at over $900 an ounce, I got mine at $380 back in 2003. I wish I had put more into gold back then. I underestimated the extent to which these fools would succeed in killing the dollar. A 177 billion deficit last year, at the best of the Bush economy, after 7 years of his "plan", this year, the economy slows, folks write off losses in the stock market, $150 billion stimulous package, and we're looking at close to $400 billion deficit, bigger than all previous single year deficits prior to this Bush administration. And a housing bubble that burst, and a seize up in the credit markets. A fed that is supposed to fight inflation, but the economy is so weak and the dollar so weak they can't afford to fight inflation, so they keep stimulating and let the dollar fall and inflation run rampant.
Gold is a sucker's investment. It has a return of somewhere around 4%. You might make some money playing with snakes, but in the end you'll get bitten. Growth, growth and income, agressive growth, and international mutual funds are the solid steady winners. All have better returns than gold in the long run.
Gold is just part of of a diversified investment plan. There are times that gold does really well and one would be foolish not to get in on it. Mine has earned far, far, far more than 4%. And gold tends to do well when the stock market is down.
Commodities in general and gold in particular are poor choices for an investment. The return is far too low to justify the risk.
