Peter Peterson interview on Charlie Rose

[tulak]

I was going to respond to the 'Is this rally for real' thread, but figured I'll spawn a new thread...

I watched this interview with Peter Peterson last night on Charlie Rose:

Charlie Rose - Pete Peterson

The part that caught my attention was the statement that Vockler predicting a 75% chance of a major dollar decline within the next 5 years, assuming we don't manage our deficits.

I also enjoyed the part where he discussed foreign ownership of our debt and the perspective of foreign debt owners.

Not to be doom and gloom, but I sure felt that way during parts of the interview...

Now the question is, how do you plan for it in your AA?

 

[haha]

I was going to respond to the 'Is this rally for real' thread, but figured I'll spawn a new thread...

I watched this interview with Peter Peterson last night on Charlie Rose:

Charlie Rose - Pete Peterson

The part that caught my attention was the statement that Vockler predicting a 75% chance of a major dollar decline within the next 5 years, assuming we don't manage our deficits.

I also enjoyed the part where he discussed foreign ownership of our debt and the perspective of foreign debt owners.

Not to be doom and gloom, but I sure felt that way during parts of the interview...

Now the question is, how do you plan for it in your AA?

Stop deluding ourselves with the word "AA", and realize that when things like today are happening, it is all rank speculation.

Ha

 

[REWahoo]

Please specify which "AA" you guys are referring to - Asset Allocation or Alcoholics Anonymous?

 

[dex]

Read and learn about investing in foreign currencies, unheadged foreign bond funds and unheadged foreign stock funds.

 

[ziggy29]

Not to be doom and gloom...

Too late.

 

[Running_Man]

I just listened to the entire interview. The interview provides for good thought on what to be aware of in the future but really offers no insight on what individuals can actually do, it seemed to be mostly political solution oriented.

When I listen to reasoned thought such as Paul Peterson's it becomes clear to me that over the next several years there will be many events that will greatly effect the investment landscape that the top leaders in business and politics realize but are unable to act upon in prudent fashion. I anticipate that landmines will continue to blow up - specifically in his commentary the concern that a second round of home price declines would prove to be extremely detrimental to the United States. the need for tax increases and a decline in home prices leads me to believe that deflation remains a more likely outcome in the next 5 years than does any inflation. Wages and incomes and values of holdings are falling faster than the effect of government spending.

In such an enviroment larger allocations to safe cash to me would be more prudent.

 

[unclemick]

Hmmm - if were 21 again, perhaps Vanguard Total World Stock Index plus some local currency CD's, short term corporate or similar for spending money/reserve/etc.

Diversification to the outer planets - I don't think is an option.

Of course - if you are old - ??pssst - Wellesley



heh heh heh -

 

[unclemick]

Any history buffs out there?

Rumor has it - the British pound began to get shakey during the Boer War - when they came to the upstart American banks for credit.

The other fun stuff came later during the next 50 years.

heh heh heh -

Sooo we're gonna hear Pete better than we heard Bogle, Buffett et al?

Riiiight!

 

[bd68]

dex,
Do you have specific funds that you like that do what you suggest?
Thanks for any insight.
bd

 

[Red_y]

bd68, I've got a couple of suggestions for the foreign bond exposure. I hold FNMIX and LSGLX in my portfolio because I'm retired outside the US but with the majority of my retirement assets in US accounts (in US dollars).

I picked these two funds based on past performance and the fact that they mostly did not hedge against the US$. This info is a couple of years old, from back when I had a Morningstar premium subscription and could read the full analyst's reports on the funds. FWIW, both funds sank precipitously during the recent financial troubles, but have recovered nicely.