Thursday, October 11, 2007

Spectre of sovereign wealth funds

One of the most insightful & well researched articles I've read in some time. The author puts to ink what I've been thinking, and often expressing for some time. We will see American companies have their boards of directors and CEOs replaced by Indians, Chinese & Russians albeit lettered with MBAs from Harvard. The world's equity markets will become glaringly obvious to all that they are politically-manipulated by central banks. Earnings will be plowed back into foreign economies and sheltered from US$ weakness. Corporate earnings will eventually be exposed as merely inflationay as the stocks of these companies appreciate only nominally. For Americans it will mean hyperinflation as their dollars import less and less from overseas and more of their purchasing power must be budgeted to feeding themselves from the shrunken number of domestic farmers whose land is now largely controlled by the Agriculture Cartel.
What other alternative do foreign dollar holders have? We no longer offer them gold redeemability. Our bond notes are recognized as just another trap. So, they'll just buy up what we have until we can no longer afford it ourselves as our currency goes into the dustbin of history.
Physical precious metals - in hand - and stronger currencies like the Swiss franc are the only safe harbor for Americans. This scary article is linked below.

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