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Good op-ed piece in NYT today
Old 08-19-2009, 11:04 AM   #1
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Good op-ed piece in NYT today

Nothing that we do not already know, but Buffet coins a new term "greenback emissions"!

Buffett: Slow Growth and the Greenback Effect - General * US * News * Story - CNBC.com
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Old 08-19-2009, 02:02 PM   #2
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If we are in "unchartered waters" as Buffet says, what does that mean for bonds going forward? Do we keep investing in our bond funds as usual, or is this going to be something totally different we have never seen before this time if we don't get our act together to fight inflation and the falling dollar?
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Old 08-19-2009, 02:08 PM   #3
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Warning: You should verify this before taking my word !!!

Seems I remember reading or seeing on the news that Buffet now owns more Muni's than he has ever owned. I think he bought during the crash when my eyes looked like a deer in the headlights.
Steve
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Old 08-19-2009, 02:59 PM   #4
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"Uncharted waters" means nobody knows what the outcome will be and if that outcome is realized in our lives?

With regard to Buffet (I am not sure ) but I thought they were International Muni's (possibly Brazil) as he took a major currency position there (pre FC) when he was correctly betting against the Dollar.

My take is the only viable action (politically) is (controlled inflation) in the x%-10% range at the appropriate time for a decade or two.

I think there is still a good risk of a second round of deflation (many pundits that predicted the FC correctly) are calling for it, (ex. Prechter.Roubini).

Other than hopefully future SS payments, "I do not have a dog in this fight", but I still find it interesting to watch it unfold from afar!
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Old 08-20-2009, 12:47 AM   #5
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I haven't read that Communist rag since I lived in NY long ago.
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Old 08-20-2009, 08:01 AM   #6
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My favorite quote from the article. For all you dirty market timers:

Quote:
Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes. In fact, John Maynard Keynes long ago laid out a road map for political survival amid an economic disaster of just this sort: “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
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Old 08-20-2009, 09:08 AM   #7
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Old 08-20-2009, 01:39 PM   #8
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Originally Posted by NYEXPAT View Post
With regard to Buffet (I am not sure ) but I thought they were International Muni's (possibly Brazil) as he took a major currency position there (pre FC) when he was correctly betting against the Dollar.
I'm not sure what all he bought but I found an article about some of the purchases.
Steve

Fundmastery Blog Blog Archive Buffett Buying Muni Bonds
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Old 08-20-2009, 04:14 PM   #9
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I read(I think yesterday) an article in the Market Watch website where Buffet writes that we may see inflation similar to the late 1970s. I am in agreement with Buffet but the problem is the "when" can we expect such scenario. For the time being, others are screaming "DEFLATION".....perhaps so, but again until when? I personally am not feeling much deflation in my day to day life. If anything I think we are in disinflation.
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Old 08-20-2009, 07:43 PM   #10
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Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation
Except they can't. At least not directly. The Fed President isn't an elected position.

Bernanke's reappointment is in the bag already and will be made official within a couple of months - well before the time when he'll need to start tightening monetary policy in earnest. Then, his new term will run for five years so he won't be facing the current president for another reappointment unless Obama gets reelected. I think he's going to have a pretty clear runway to conduct appropriate monetary policy regardless of what the pols think.

Bernanke's done a good job saving the world. He's owed the benefit of the doubt at this point.
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Old 08-20-2009, 07:45 PM   #11
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Originally Posted by cardude View Post
If we are in "unchartered waters" as Buffet says, what does that mean for bonds going forward? Do we keep investing in our bond funds as usual, or is this going to be something totally different we have never seen before this time if we don't get our act together to fight inflation and the falling dollar?

I'm doing the same thing I always do when facing "unchartered waters" (which is always). I own a little bit of everything.
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Old 08-21-2009, 06:50 AM   #12
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I'm doing the same thing I always do when facing "unchartered waters" (which is always). I own a little bit of everything.
Good point. In fact, due to the complexity of the financial system, I guess we are always in "unchartered waters", which I guess should really be uncharted waters. But, if they are unchartered, then I guess they are probably uncharted as well.
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