if you think about it, how is the euro any much different from the sterling? the euro countries have had a similar economic dynamic as the UK had in the past decade. I think what's gonna happen in the next decade, as suggested by Siegel's 'Future for Investors', the Asians and the Arabs flushed with the foreign currency reserve will need to spend it... what are they gonna do? they are gonna buy America, and they are gonna use a lot of dollars to do it. Considering the tax and legislation structures, and the current weakness of the dollar, the US of A is a much more attractive aquisition target than the aging, hi-tax Europe. I am bull, and I am loading up on the US of A, and am waiting for the asians/arabs to pay up.
I don't know what's worse, the Euro or the Dollar. Both horrible currencies to hold, along with the sterling. I would be long Yen here. Best big currency out there.
holding paper currency is always tough, however, the real assets, albeit valued in dollars, will go up when the paper currency goes down.... for recent example, see Brazil. so, I am talking about stocks (companies), commodities, timberlands, oil rights etc. Even real estate could be an excellent bet, as long as the numbers make sense. RE is always an inflation hedge, and if bot right, it provides positive yield (cash flow) while doing the hedging for you. Anywhere you go around the world, you can see how people would kill to come to America and own a piece of her.
Excellent Commentary All ........................................................................... It is not often that the Oil Welfare States.... and Asian countries supported by manufacturing will get this kind of opportunity at owning large percentages of some of the best US Companies. Not only are the assets down in price, the dollar is down as well. If there ever was a time for foreigners to invest, it is now. There will most likely not be an opportunity like there is today anytime soon. Now, to really set US Assets on fire, would be to get government leadership that understands productivity. The Oil Welfare states in particular, now that it looks like alternative energy is really going to happen this time, should be very excited to buy all the best equities that they are legally allowed to, seeing how the reduction of oil usage may in fact become a not too distant reality. The Asian countries should really get more serious if the US leadership really gets serious about... Elimination of the IRS...and the implementation of a consumption tax. Elimination of legal largesse regarding small business. The US pulls out all the stops to alternative energy development that does not include oil products. Centering on a world wide stock market that is no longer segmented that anyone can have access to at little or no cost for electronic name transfers. Funds could be made available for regional US development in terms of economic geographical segments. This in turn could eliminate huge amounts of debt, and eliminate debt costs from productivity. The US could very quickly become far more productive and attractive for investment, and could in effect eliminate much of the current competition. The US has got to get leadership that knows what real productivity is....
Being saying the Eur will collapse for a while, might take 6 months though. The catalyst will be when Trichet starts cutting rates.
but what if we're at the end of a big expansionary cycle?... aggregate demand for all items falls, prices fall, etc. cash is king. I'd buy the USD any day. Eurozone will follow us into recession, and will the dollar shorts, with oil demand tumbling, even remember why they are carrying Euros? [tourist currency]
Gisele Bunchen diversifying into euros was probably the biggest sell signal on the currency we'll get.