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A glimmer of hope - Heed the advice of The Smartest Man
Old 10-26-2008, 11:07 AM   #1
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A glimmer of hope - Heed the advice of The Smartest Man

reportonbusiness.com: Heed the advice of The Smartest Man

This guy at least called the decline and now he is getting positive.
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Old 10-26-2008, 11:41 AM   #2
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Interesting! This guy sure has plenty of qualifications and a successful history in predicting market trends.

Of particular interest to me is the fact that he thinks the U.S. has a 30% chance of having a currency crisis.

I hope he is right about the world getting out of this recession pretty soon.
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Old 10-26-2008, 11:49 AM   #3
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Stupid question, but what exactly would a currency crisis be?
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Old 10-26-2008, 12:41 PM   #4
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Stupid question, but what exactly would a currency crisis be?
The US$ would fall steeply against other major currencies (yen, euro) in a short period of time. Say, a 30-50% decline in 2-3 weeks.
It is possible but not likely - because in order to have a currency crisis you need two ingredients - a weak currency and a strong currency. There currently is no strong freely traded currency in the world other than the US$.

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Old 10-26-2008, 01:03 PM   #5
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"There are, however, some things The Smartest Man wouldn't touch. They happen to be the assets the investing masses have flocked to in this crisis: U.S. Treasuries and the greenback."

When a poster here mentions CDs, s/he gets pounded on for inflation risk. Yesterday, on another thread, I mentioned my zero coupon bond fund is running in the black, and I want to pounce on myself because how can I continue to trust in "full faith and credit" of the U.S. govt.? This looks like the buying opportunity of my lifetime, and I'm buying stock funds the same way I did in 1974, slowly wading in for the long term.
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Old 10-26-2008, 01:10 PM   #6
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I generally think the "Smartest Man" analysis is sound. How does a debtor country like ours thrive against other producing countries? We all know the US has been running a trade deficit forever. Same as individuals, how long can we use our home as ATM (read HELOC)?

But on the other hand, there is yet no reason for the greenback to crash (knock on wood), as MB pointed out. But I would keep very close watch on the foreign stock markets and their currencies. Never say never...
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Old 10-26-2008, 01:10 PM   #7
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"There are, however, some things The Smartest Man wouldn't touch. They happen to be the assets the investing masses have flocked to in this crisis: U.S. Treasuries and the greenback."
Just goes to show there's always a bubble somewhere. In a "flight to safety," the bubble is in the asset considered "safe."
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Old 10-26-2008, 01:15 PM   #8
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Just goes to show there's always a bubble somewhere. In a "flight to safety," the bubble is in the asset considered "safe."
I remember 2 years ago, discussing the housing situation with a younger guy in his late 30s. He said you couldn't lose money in a McMansion; immediate return via mortgage tax deduction, plus the price kept rising up.

Have not talked to him recently about it, but I will not bother. It is not nice to rub salt into someone else's wound...
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Old 10-26-2008, 03:08 PM   #9
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I'm going to reserve judgment until I hear what Marilyn Vos Savant says. Anybody got Parade magazine yet?
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Old 10-26-2008, 03:16 PM   #10
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In a "flight to safety," the bubble is in the asset considered "safe."
Ding! Ding! Ding?
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Old 10-26-2008, 05:57 PM   #11
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I'm going to reserve judgment until I hear what Marilyn Vos Savant says. Anybody got Parade magazine yet?
I cancelled my subscription. Let us know what she says.
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Old 10-26-2008, 06:46 PM   #12
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one of my newsletters tracks the $$$ and the high came back in 1985 and it's been a steady slide since. according to their chart analysis this is a normal rally and it will soon end and another slide will start ending in sometime next decade
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