AN OASIS IN A WORLD OF HACKS, HUSTLERS, AND HIRED SPIN
posted by The Cunning Realist at Monday, November 05, 2007
``As long as the dollar's decline doesn't trigger inflation, it's a good thing, helping the U.S. economy to stay out of recession,'' said Robert Mundell, a professor at Columbia University in New York who won the Nobel Prize for economics in 1999.Really?! The dollar's decline is a good thing?!!! I didn't take one business class in college, (though I have a degree in math), but I can't think that a declining dollar is a good thing! Sort of goes against common sense.
Oh, it's a good thing for somebody. What's left unsaid is, for whom? Probably not for anyone whose investment strategy or retirement fund depends on "common sense".
...repeating iTulip's favorite quote..."Anybody who plays the stock market not as an insider is like a man buying cows in the moonlight."-- Daniel Drew, 19th century speculator
Interesting article. So is this the beginning of the end? As more people divest from the dollar, it becomes even less valuable. This causes a run on the dollar and we end up like Argentina. gas costs $10 a gallon and my 401k goes down the tubes.Is that about right?
Had a good laugh at that one but added to some other factors Ms. Bundchen's as good a contrary indicator as I've seen in awhile so I'm shifting to intermediate long positions on the $USD against the Euro. Longer term I'm still a $USD bear alas; don't see a way out of that until our current account is lower and our interest rates higher. Maybe after the '08 Olympics and China can't hold the peg anymore we'll get that last $USD prop kicked out of the way and make a real bottom for the long crawl up while China burns. Of course by that time I rather doubt the $USD will be the world's reserve currency anymore; we're going to miss the privileges of global seigniorage but we'll probably have greater concerns by then I'm sure.
kilfarsnar...yes. bad quote by Mundell. Mundell is one of the good guys. IMO. He believed in the gold standard to keep the politicians and reserve banks in check. I'm a big believer in Austrian economics but I learned alot about how the world works from Mundell and Wanniski. They wanted to establish an economic train of thought that more closely matched the reality of our economy. The demand side economic theories tended to push economies into stagflation. Their supply side economic theories make better predictions by taking into account political considerations...and minimizing the harm they cause. The arrogant sounding book "The Way the World Works" by Jude Wanniski convinced me what geniuses these two men were. "When the international monetary system was linked to gold, the latter managed the interdependence of the currency system, established an anchor for fixed exchange rates and stabilized inflation. When the gold standard broke down, these valuable functions were no longer performed and the world moved into a regime of permanent inflation."RAM
I searched the story and it is still making the rounds. It is still being reported as true, but according to this article it is made up. It is amazing the number of people that jumped on it, as if this confirmed their belief and wanted to let everyone know --- "See!". What's the saying, don't believe anything you read, and only 1/2 of what you see ;-), or something like that... The subject is serious (US dollar), but the story just made a mockery out of it."But just a few minutes ago, CNBC Squawk Box producer Stephanie Landsman spoke by telephone with Anne Nelson, Bundchen's manager. Nelson tells us reports that Gisele wants to be paid in euros are "false." Nelson's take: "Some idiot in Brazil reported something just to make news.""http://www.cnbc.com/id/21641711"After Bloomberg News picked up the story from a Brazilian magazine, the "Bundchen Bashs Buck" piece hurtled around the globe. And in the best tradition of "The Front Page," the media outlets that picked it up didn't let the facts get in the way of a good story."Only in the ninth paragraph of the Bloomberg story, after various comments putting Bundchen as a dollar bear in the same league as Warren Buffett and Bill Gross, is there a comment from the model's manager that Gisele (as the tabloids call her) is paid in dollars for work in the U.S., in euros for European work, and in reals when she works in Brazil.""http://online.barrons.com/article/SB119438902037884428.html?mod=googlenews_barrons
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I am a New York City resident in my forties, an investment professional, and a conservative. I have an MBA from Columbia University.