Investment Witicisms

“Wall Street is a group of people who take your money, combine it with their experience, and by some sort of magic turn it into their money and your experience”

“Confidence grows like a coconut tree and drops like a coconut”

“What wise men do at the beginning fools do at the end.”

“Never confuse brains with a bull market”

“You can fly. Jump off an 80-story building and you’ll fly for 79 floors. It’s the stopping that gets you.”

“An economist is a man who states the obvious in terms of the incomprehensible.” —Alfred A. Knopf

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5 Responses to Investment Witicisms

  1. John McLaren says:

    Miller,

    I have very much enjoyed your Musings. Question: What happens to the value of the $ with the Fed and the govenernment printing money? Over the next year, next 3 to 5 years? And if you think it will get crushed, where do you invest to protect youreslf?
    Cheers,
    John

  2. Paul F. Miller, Jr. says:

    John…I completely agree that the dollar stands to lose big time…both domestically and internationally……..mainly because I see a large part of the deficit being monetized. China and other potential financing sources will not have the flow of new dollars they once had because trade has collapsed and our trade deficit has contracted. Therefore, the Fed will have to buy a large part of the treasury offerings unless our domestic savings rate rises very substantially, and if that happens economic growth will be agonizingly slow. It’s very hard to see how inflation can be avoided, but there is a big question as to when it appears. It won’t be in 2010, and maybe not in 2011 or 2012.

    As to how to protect oneself, a difficult question. Stocks tend to do poorly as inflation rises because interest rates take off. Land, real estate and commodities tend to do better than stocks…..and gold is always a possibility.

  3. Barry says:

    Paul;
    I agree with you that given a very low level of capacity utilization both fixed assets and labor (supply of which now has become international)supply can increase a lot at constant price, I mean the aggregate supply curve is linear before becomes upward slopping. Thus inflation is less likely to come directly but if dollar looses its value then imports will become costlier. However,China will not let its currency rise too much against dollar as it would like to sell to US and same for most Asian countries. One way to keep Yuan appreciating is for china to buy US dollars. Given the conditions of all developed countries, I am not sure that Euro or Yen can rise too much against dollar. True US economy sucks but every one else suck more. Given this situation and if we do get a control on our health care cost (through some form of universal health care)which may help the future outlays, things may be somewhat less painful. I guess what I am saying is unless dollar looses the status of reserve currency inflation may not become serious issue. What do you think? Thx.
    Best- Barry

  4. Paul F. Miller, Jr. says:

    Barry…my question is simple. Which comes first, inflation or the dollar’s loss of reserve currency status? The only really serious threat to the dollar’s standing as a reserve currency is rapid inflation in the U.S., inflation that dollar holders see a real threat to the value of their wealth.

  5. Rich Keal says:

    Are you a fan of Mises? I have a home in Hungary where my wife is from and found your site while looking for articles on problems with the EU. I have serious concerns about the viability of this banking scheme!
    I look forward to more of your perspective!

    Cheers

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