WHY IS THE US ECONOMY STRONG ENOUGH TO CONTINUE TO CLIMB FOR THE NEXT SIXTY YEARS
The investment biker gives the reader insight into the way Jim thinks. Jim says in 1990, most of his money was in utility stocks, U.S government bonds, and foreign currencies. Jim owned utility stocks particular nuclear power for companies like Illinois power and Niagara Mohawk which were distressed. Jim's next comments strike as parallel to problems in 2007, as he says, "I thought U.S Interest rates were headed south, so I was bullish-optimistic-on bonds and bearish-pessimistic-on the dollar, that is, I expected the price of bonds to rise and that of the dollar to fall. I figured politicians would do everything to keep the economy going. Since they aren't very smart, all they really know how to do is cut interest rates. I bought foreign currencies, mainly certificates of deposit denominated in guilders or deutsche marks, reasoning that the dollar would go down as the politician's cuts rates." Jim that was interesting insight over 17 years ago and today the dollar demise is causing exports to increase, unemployment to drop, bond yields to drop and price to increase, GDP to rise, consumption to drop, investment to decrease, real wages to drop, and credit to get tighter. The US economy is strong enough to continue climbing for the next sixty years without disruption from business cycles. Commodities will continue to be a profitable sector for the rich and commodities indexes supposing the commodity boards can remain solvent and stable.[Learn More ...]
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