Templeton feeling bearish

[denverbill]

The legendary investor predicts the U.S. dollar will lose 40 percent of its value.

SARASOTA -- Legendary investor Sir John Templeton is worried about the U.S. economy and stock market.

Gary Moore, a Sarasota investment adviser who met with Templeton last week in the Bahamas, says Sir John has never been more bearish.

Moore says Templeton is telling investors to avoid U.S. stocks and sell off excess residential real estate. He's also suggesting they buy bonds -- not U.S. bonds, but Australian, New Zealand, and Canadian bonds.



The reason for all this, Moore says, is that Sir John, who founded the highly successful Templeton Growth Fund and Templeton World Fund, believes the dollar will lose 40 percent of its value against foreign currencies in the coming months, especially the Japanese Yen and Chinese Yuan.

<snip>

http://www.heraldtribune.com/apps/pbcs.dll/artikkel?SearchID=73150449951098&Avis=SH&Dato=20031014&Kategori=NEWS&Lopenr=310140464&Ref=AR

[LoneStarLiberal]

1. Watch It Sink Post-Summit

Starting with our Chimp-in-Chief's visit to the summit in China next week.

"Keep financing our debt by buying our bonds...but wait! Float that damned yuan already!"

[salin]

8. exactly... Bush is pressuring China - to strenghten the yuan compared

to the dollar. Goal is to decrease the trade deficit. Most economists commenting on this suggested it is a very risky move and could go wreak havoc. Guess it is not just the academic economists who see how vulnerable the economic policies of bushco are making the US economy.

[denverbill]

9. Yes, I agree 100%.

If you let the yuan float, who knows where it will float too? Meanwhile, America's consumer economy gets kicked in the nuts by higher priced TV's, electronics, clothing, etc, etc.

Remember that $300 tax cut you got? Guess what? Inflation is gonna erase it mighty fast.

[Wickerman]

2. Rut- Row

Or how ever Scooby sez it...

In Gold Financial's most recent newsletter, Anderson confirmed what Templeton is saying.

"We continue to see the greatest danger in our outlook coming from ongoing debasement of the U.S. dollar in the world market and the (Bush) Administration's wish to have flexible exchange rates," Anderson wrote.

Under pressure in this election year to do something to protect U.S. manufacturers, the Bush administration has been advocating a weaker dollar, Anderson said. A weaker dollar would make U.S. goods less expensive, allowing manufacturers to sell more both domestically and abroad.

Once again Bush* is in above his head - this is what happens when a dimwatt cokehead C Student who relied on Legacy Affirmative Action is given the helm of something he can't hope to understand.

[denverbill]

3. I have to disagree.

He is a dimwit cokehed C student, but his economic policies are made by Grover Norquist, whose reason for living is cutting taxes so much that the govt will have to cut spending or go bankrupt. He doesn't give a shit about anything except cutting taxes.

I only hope an economic downturn crushes him first, and that I get to kick him in the nuts while he's down.

[Voltaire99]

4. Cf. Nobel Laureate Stiglitz' current piece via Commondreams.org (url)

http://www.commondreams.org/views03/1015-09.htm

[bemildred]

5. Nice piece.

Cuts right through the bullshit:

The harsh truth is that neither the IMF nor the Bush administration really believes in free markets. They interfere with markets when it suits their
purposes. Bush supported bailouts for airlines, unprecedented subsidies for agriculture and tariff protections for steel.

The IMF is right: there is a real risk of global instability, but the underlying cause is massive US borrowing from abroad. If, some day, America's
creditors decide that they want to hold fewer dollars, it could set off large exchange rate movements, causing global instability. Why hasn't the
IMF sternly criticized these deficits?

This problem is compounded by the global reserve system, which sees most countries demanding US dollars, effectively to bury them in the
ground. The system requires the reserve currency country (the US) to be a massive debtor - to the point where others lose faith. But to solve
deep-seated problems with the global financial system, we need to go beyond the complacency that has long marked the G-7 and the
unilateralism that defines the current US administration.


It is worth noting here that burying those dollars in the ground is
economically a bad thing, they would serve better in some productive
capacity.


---

China is fortunate to have the freedom to follow its own views. Its huge foreign currency reserves give it the freedom to ignore the IMF and the
US. In the end, this may be the most compelling reason for why China should continue to run trade surpluses. Once again, China has shown its
mastery of basic economic principles. Others in the region only wish that they could have acted similarly.

[tlcandie]

6. Someone said the other day .. somewhere and can't remember who

sweetheart, maybe come to think of it, that they were investing in gold, euros and huan. I have the first two down, but huan I ran on the web and all I could find was related to antique Chinese jade discs.

Can anyone clarify this for me please? Thanks! :hi:

[bemildred]

7. I have been getting into mutual funds that

invest in foreign markets and bonds. Doing very
nicely. Canadian stuff is kicking ass right now,
as are various other places.

[snippy]

10. It is the Chinese yuan, also called the renminbi.

As long as it remains fixed to the dollar, purchasing yuan is effectively the same as purchasing dollars.

[tlcandie]

11. Thanks!!!

:D

[DinahMoeHum]

18. Try Chinese or Asian stocks instead of the yuan. . .

Me, I've already got international mutual funds, plus a gold stock and a Chinese stock that are going gang-busters - I bought both when they were near bottom. One is already appreciated 2-1/2 times the investment and the other nearly 5 times, with no signs of topping out just yet.

:kick:

[KoKo]

12. "Sir John" lives in "The Islands" and supports many very conservative

causes. If he's worried.....we'd all better be VERY Worried! Very Worried. :-(

[cliss]

13. Yup. We are inching ever closer to the abyss.

Time to get our shit together, kids. We probably don't have a lot of time. The real problem with foreign investing versus investing in the US: the rest of the world is hopelessly tied with the US. An old saying: if the US catches a cold, the rest of the world gets pneumonia. So avoiding the US will not protect us from catastrophe, because we're a global economy.

My suggestion:

1) cut expenses. Live beneath our means.

2) start saving money.

3) stay tuned to the DU, because we'll hear about here before anyone else does, or at least we'll smell smoke before the fire.

[Resistance Is Futile]

14. Smelling smoke

Smelling smoke is just what we're doing right now.

Fiscal colapses hit so rapidly that this is about as much warning as we're going to get.

[jiacinto]

15. I hope not

I really hope not.

[nomatrix]

16. US financial hegemony

I haven't seen a thread on this topic, but if you have could you direct me to it. Let me see if I've got it so far...

Euro's vs dollars-
"If the invasion of Iraq was a pre-emptive attempt to return $10 Billion in Iraqi oil from the Euro to the Dollar, take control of Iraq's proven reserves, initiate massive production in excess of OPEC quotas, reduce global oil prices, and thereby begin the process of dismantling OPEC's price controls......"
http://www.newtopiamagazine.net/issues/v2issue3/features/crudetruth.shtml

(I'm just coming to this conclusion in light of the senate voting on the $87 billion)

Is this what Templeton is talking about with the Asian currency?

http://www.atimes.com/global-econ/DD11Dj01.html

"The starting point is for the major exporting nations each to unilaterally require that all its exports be payable only in its currency, so that the global finance architecture will turn into a multi-currency regime overnight. There would be no need for reserve currencies and exchange rates would reflect market fundamentals of world trade."

Haven't we now forced this to become reality?

[grasswire]

17. that newtopia article...

....is just fascinating.