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| Bill Gates and Warren Buffett are short the dollar. |
| 2005-01-31 |
| Via Marginal Revolution: ``I'm short the dollar,'' Gates, chairman of Microsoft Corp., told Charlie Rose in an interview late yesterday at the World Economic Forum in Davos, Switzerland. ``The ol' dollar, it's gonna go down.'' Gates's concern that widening U.S. budget and trade deficits are undermining the dollar was echoed in Davos by policymakers including European Central Bank President Jean-Claude Trichet and German Chancellor Gerhard Schroeder. The dollar fell 21 percent against a basket of six major currencies from the start of 2002 to the end of last year. The trade deficit swelled to a record $609.3 billion last year and total U.S. government debt rose 8.7 percent to $7.62 trillion in the past 12 months. ``It is a bit scary,'' Gates said. ``We're in uncharted territory when the world's reserve currency has so much outstanding debt.'... Gates reflected the views of his friend Warren Buffett, the billionaire investor who has bet against the dollar since 2002. Buffett said last week that the U.S. trade gap will probably further weaken the currency. ``Unless we have a major change in trade policies, I don't see how the dollar avoids going down,'' Buffett said in an interview with CNBC Jan. 19. |
| Posted by:anonymous2u |
| #9 eLarson: IMHO, TGA >>> Art Bell and Co. Unless, of course, the pole shift happens. In which case: Phase 1: Have lots of gold. Phase 2: the Pole shifts. Phase 3: Hmm, what's phase 3 again? Phase 4: Profit! |
| Posted by: Phil Fraering 2005-01-31 4:29:06 PM |
| #8 TGA has got if figured out. |
| Posted by: Classical_Liberal 2005-01-31 4:21:19 PM |
| #7 Gold and real estate purchases represent negative expectations. Neither grow as cash or stocks do. Rising gold and real estate prices represent the top of a long term cycle as Japan over the last 25 years has shown. |
| Posted by: phil_b 2005-01-31 4:19:23 PM |
| #6 If there's one thing I've learned from listening to talk radio, it's that NOW is the time to buy GOLD. |
| Posted by: eLarson 2005-01-31 3:29:27 PM |
| #5 Dollar goes down, exports go up. Exports go up, deficit goes down. Dollar goes down, it becomes cheaper for foreigners to invest in US real estate, housing market goes up. Housing market goes up in CA or East Coast - building new homes becomes more profitable in the midwest where land and building costs are cheaper. Housing supply goes up, housing costs go down. It may be profitable for Bill Gates and Warren Buffet - who invest in currency - to short their dollars - but I fail to understand why it hurts me, as an American, to see the dollar fall and thus... exports go up and defict go down. Seems like the Euros have far more to lose over this than I do. It might make purchasing a foreign car and travel abroad more expensive, but I can buy and travel domeestic. |
| Posted by: 2b 2005-01-31 2:43:16 PM |
| #4 We need more gold, we must get all the gold. When we have more gold it means we are winning. |
| Posted by: abu GoldBug 2005-01-31 2:27:56 PM |
| #3 Btw just look at the total debt of the Eurozone, the deficits the major EU countries are running, the high unemployment... The Euro is overrated already and the markets will sort that out soon enough. The US "double deficit" is of concern but nothing matches the power and dynamics of the U.S. economy. 5 years from now we will be talking about a major Euro crisis. |
| Posted by: True German Ally 2005-01-31 2:01:55 PM |
| #2 What goes down... On the day most analysts think that the dollar goes south watch what will happen... And after it happenend all those "analysts" will have great explanations about a booming US economy, a weak Euro stability treaty, etc. etc. Doing exactly the opposite what the major analysts propose is, if you got the time and the nerves, a good strategy as any. I don't divest in the U.S. dollar, I just chose companies that perform well and are bound to perform well in 5 years. |
| Posted by: True German Ally 2005-01-31 1:58:17 PM |
| #1 And also via Marginal Revolution: . I would think that Asian central banks, by buying U.S. dollars, have been driving a massive distortion of real exchange and interest rates. 2. I would think that the U.S. economy is overinvested in non-export durables, most of all residential housing. 3. I would think that we have piled on far too much debt, in both the private and public sectors. 4. I would think these trends cannot possibly continue. Asian central banks may come to their senses. Furthermore the U.S. would be like an addict who needs an ever-increasing dose of the monetary fix. This, of course, would eventually prove impossible. 5. I would think that the U.S. economy is due for a dollar plunge, and a massive sectoral shift toward exports. Furthermore I would think it will not handle such an unexpected shock very well. 6. I would buy puts on T-Bond futures and become rich. 7. I would think that Hayek's Monetary Nationalism and International Stability, now priced at $70 a copy, is the secret tract for our times. Of course that is not me. But at least someone appears to believe in Austrian business cycle theory. By the way, here is one summary of the theory, although I do not agree with the characterization in all respects. |
| Posted by: anonymous2u 2005-01-31 1:42:05 PM |