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When rich guys' superstitions pose a public threat(Gates & Buffett talk down the dollar at Davos)
Townhall.com ^ | February 21, 2005 | Jack Kemp

Posted on 02/22/2005 1:10:44 PM PST by The Loan Arranger

According to USA Today, "Our greatest businessmen (Bill Gates and Warren Buffett) think we are doomed to fail." Gates demonstrated his pessimism in an interview at the World Economic Forum in Davos, Switzerland, when he told reporters, "I'm short the dollar. ... The ol' dollar, it's gonna go down."

It's not surprising that the world's richest man came down from the Alps pessimistic. The misconceptions, myths and superstitions that pass for sound economics in Europe these days remind us that while socialism may be dead as a political force in the world, its zeitgeist of radical egalitarian leveling, gigantic government and bureaucratic control over the minutiae of everyday life lives on in the hearts of European politicians.

German Deputy Finance Minister Caio Koch-Weiser is illustrative. At Davos he was preaching that the U.S. budget deficit is "the No. 1 risk, disregarding geopolitical risks" to the global economy. He said it was urgent for President Bush to offer a "credible" plan for getting the deficit under control.

The unstated plan, of course, is a pre-emptive strike" against estimated future budget deficits in the form of higher tax rates on investors, ostensibly to improve investor confidence. It's nothing but 21st-century economic quackery, much like 19th-century physicians thought the way to cure a sick man was to bleed him.

The "Genius of Microsoft" also has heard this doom and gloom preached by his close friend and bridge partner, the second-richest man in the world, Buffett, who told Forbes Magazine recently: "The rest of the world owns $10 trillion of us, or $3 trillion net. If lots of people try to leave the market, we'll have chaos because they won't get through the door."

(Excerpt) Read more at townhall.com ...


TOPICS: Business/Economy; Editorial; Foreign Affairs; News/Current Events
KEYWORDS: berkshire; billgates; billionaires; borsheims; buffett; cocacola; geico; jackkemp; microsoft; monopoly; omaha; wealthy; windows

1 posted on 02/22/2005 1:10:45 PM PST by The Loan Arranger
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To: The Loan Arranger

This is the signal to buy dollars.


2 posted on 02/22/2005 1:12:43 PM PST by <1/1,000,000th%
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To: The Loan Arranger

The main thing holding the dollar up is the Asian Governments and the Japanese and Chinese central banks in particular. It frustrates the heck out of most anti-u.s folks that these countries continue to buy our government securities. In a way they are subsidizing U.S hegemony. That probably serves their interests especially since it provides a powerful lever to pull to prevent confrontation.


3 posted on 02/22/2005 1:18:32 PM PST by Odyssey-x
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To: <1/1,000,000th%
This is the signal to buy dollars.

Soros of course is singing the same toon. However, the US leads Europe in productivity, economic growth, lower tax burden, and most other economic indicators, and Europe is also burdened with worse aging population then we have. There is no way in heck I would be betting on the Euro longterm over the dollar.

4 posted on 02/22/2005 1:24:14 PM PST by Always Right
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To: Always Right

Even Saddam had dollars with him at his capture.


5 posted on 02/22/2005 1:27:40 PM PST by <1/1,000,000th%
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To: The Loan Arranger

Buy dollars, dump windows


6 posted on 02/22/2005 1:29:26 PM PST by Tarpon (Hate is not a plan for America)
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To: The Loan Arranger
German Deputy Finance Minister Caio Koch-Weiser is illustrative. At Davos he was preaching that the U.S. budget deficit is "the No. 1 risk, disregarding geopolitical risks" to the global economy. He said it was urgent for President Bush to offer a "credible" plan for getting the deficit under control.

Of course, German Deputy Finance Minister forgot to mention the German deficit, which is at 3.7% of German economy. That happens to be the same percentage as US deficit relative to US economy.
7 posted on 02/22/2005 1:36:47 PM PST by AdrianR
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To: <1/1,000,000th%
This is the signal to buy dollars

Anybody holding dollars is going to get bent over a table. Fannie Mae is melting down. Kiss the money center banks goodbye, kiss the money market repos goodbye, kiss real estate goodbye, kiss the bond market goodbye, etc. Oh, and there's the little problem of the FedGov having more unfunded liabilities than all the friggin privately held wealth in America....not counting a GSE and banking bailout mind you. Yep, I'm afraid the dollar is going to have die.....again.

8 posted on 02/22/2005 1:51:32 PM PST by AdamSelene235 (Truth has become so rare and precious she is always attended to by a bodyguard of lies.)
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To: <1/1,000,000th%

explain that to the south korean central bank today, and the other central banks who may well follow their lead.


9 posted on 02/22/2005 1:52:26 PM PST by oceanview
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To: Always Right

currencies are becoming less and less of a "bet" on the underlying economies that float them. its all paper, liquidity, and trade flow.


10 posted on 02/22/2005 1:53:34 PM PST by oceanview
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To: Odyssey-x

china does it because they have to do something with all the dollars they accumulate.

japan does it because they need exports to the US and they cannot afford to have the yen be fairly valued - the price of their exports to the US would rise significantly.

this whole currency game is going to blow up if we are not careful - and the underlying problem is the existence of the chinese peg. force china to drop the peg, and the rest of the players would achieve some kind of sane equilibrium. absent that - buckle up.


11 posted on 02/22/2005 1:58:26 PM PST by oceanview
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To: The Loan Arranger

Don't blame the messenger. Gates and Buffet aren't the problem. The dollar is going down. The government can't spend so much with no consequences. It's just supply and demand. The gov. has more debt than the world is prepared to buy.


12 posted on 02/22/2005 2:10:11 PM PST by monday
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To: The Loan Arranger

Yes, Bill and Warren are social libertines who are now more obviously leaning toward socialism. But doesn't Jack have enough knowledge to know that their information came from very highly paid economists? ...can't ride the propped-up dollar gravy train forever. Adjustments happen sooner or later. Hang on and save, folks.


13 posted on 02/22/2005 2:47:59 PM PST by familyop ("Let us try" sounds better, don't you think? "Essayons" is so...Latin.)
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To: AdamSelene235; oceanview
LOL!

You sound like Jimmy Carter. I'll trust the markets.

Seriously, what other currency would you buy?

14 posted on 02/22/2005 3:09:46 PM PST by <1/1,000,000th%
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To: <1/1,000,000th%

I agree. Gates may know 1's and 0's like champ, but he doesn't know everything.

Cheer up Bill, it's cool to be you.


15 posted on 02/22/2005 3:19:04 PM PST by SaltyJoe ("Social Justice" begins with the unborn child.)
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To: SaltyJoe
Here's another thread on the topic.
16 posted on 02/22/2005 3:23:09 PM PST by <1/1,000,000th%
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To: <1/1,000,000th%
GROAN! If you play business like a Machiavellian gangster, then don't expect sympathy when you display fickle loyalties. If these tycoons were a little more honorable than ambitious they'd roll with the punches with better grace. What do they expect from the public? "Oh boo hoo, you lost tens of millions of USD from your billions in offshore accounts! Oh the pity! The horror! Should I fetch your silk hanky to blow thy nose?"

If Gates really wants to play the hero then he should come out stumping for American products or at least for American society, "I'm bully on America!" I don't expect the MSM (which thoroughly hates Gates) to report on him accurately, so that means he'd have to put his own message out with a positive and vigorous attitude. If he should speak against the report that makes him out as a wimpy sore loser it would shore up his image and investments. "I'm Bill Gates. There was a report that gave a false impression of my comments on the USD saying that I was worried. Let's get something straight. I'm BILL FREAKIN' GATES! You think I worry about Soros and other small time currency gamblers? After what Soros pulled during the 2004 election, he SHOULD be worried. America's my home. I export America to the world. The dollar is undervalued and that makes my job and vision easier to promote. Don't believe the hype. Thank you. (p.s. Apple sux)"
17 posted on 02/22/2005 3:50:57 PM PST by SaltyJoe ("Social Justice" begins with the unborn child.)
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To: <1/1,000,000th%
Seriously, what other currency would you buy?

There is simply no viable currency available on the planet as we are in an era of competitive currency devaluation.

The best thing to do is to hold short positions and stuff the short money into hard assets that have not been distorted by credit bubbles.

For example, a FNM short with the money in BPT or CEF works for me.

18 posted on 02/22/2005 4:34:52 PM PST by AdamSelene235 (Truth has become so rare and precious she is always attended to by a bodyguard of lies.)
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To: <1/1,000,000th%
You sound like Jimmy Carter. I'll trust the markets.

That insignificant Georgia Tech drop out?

I drink my whiskey clear, thank you very much.

19 posted on 02/22/2005 4:36:31 PM PST by AdamSelene235 (Truth has become so rare and precious she is always attended to by a bodyguard of lies.)
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To: AdamSelene235
That insignificant Georgia Tech drop out?

LOL!

I like your plan. I was afraid you were one of those guys who say buy Euros or buy Yuan.

20 posted on 02/23/2005 8:15:44 AM PST by <1/1,000,000th%
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To: SaltyJoe

LOL! You may be right.


21 posted on 02/23/2005 8:22:35 AM PST by <1/1,000,000th%
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