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08-19-2009, 01:02 PM
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#2
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Full time employment: Posting here.
Join Date: Feb 2006
Posts: 599
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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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08-19-2009, 01:08 PM
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#3
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Full time employment: Posting here.
Join Date: Mar 2008
Posts: 654
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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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08-19-2009, 01:59 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: Miraflores,Peru
Posts: 1,992
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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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08-19-2009, 11:47 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,588
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I haven't read that Communist rag since I lived in NY long ago.
__________________
I have outlived most of the people I don't like and I am working on the rest.
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08-20-2009, 07:01 AM
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#6
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Full time employment: Posting here.
Join Date: Apr 2006
Posts: 897
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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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-CC
__________________
"There's those thinkin' more or less, less is more, but if less is more, how you keepin' score?
It means for every point you make, your level drops. Kinda like you're startin' from the top..." "Society" - Eddie Vedder
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08-20-2009, 08:08 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2005
Posts: 10,252
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One way I remind myself on how to spell his name is that all the letters you might wonder about are doubled: There are 2 r's, 2 f's and 2 t's.
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08-20-2009, 12:39 PM
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#8
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Full time employment: Posting here.
Join Date: Mar 2008
Posts: 654
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Quote:
Originally Posted by NYEXPAT
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.
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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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08-20-2009, 03:14 PM
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#9
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Recycles dryer sheets
Join Date: Jan 2008
Posts: 75
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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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08-20-2009, 06:43 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
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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
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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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08-20-2009, 06:45 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Posts: 5,381
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Quote:
Originally Posted by cardude
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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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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08-21-2009, 05:50 AM
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#12
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Full time employment: Posting here.
Join Date: Feb 2006
Posts: 599
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Quote:
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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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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