Yuletidings & happy holidays! As i'm enjoying the delectable choices
of holiday candy and ponder at years end, I'm bothered pleasantly &
gladfully, by familiar adages of civilization and but wonder at the
hidden meanings that i've yet to unfold let alone the possible
personalities of creators that they've each originated from. Like
snowflakes, they are indeed different, an exemplar of uniqueness, and
i might add not unlike holidays that it means a different thing to
different people. There's this 'Friendship is a ship made of
gold...'; or 'Money makes the world go around.'; howabout 'Love is a
many splendored thing.' Ah! and what is it that's said that can't be
cured by herbs and if it is not madness, it is not love... Does
another adage ring true about its piers that maybe the beauty of
these structured group of words is in the very eye of the beholder.
Is this translatable to what will be the subject at hand, finance &
investment climates, in which money is used, traded on, shifted,
moved from point A to B, bought and sold. Money the subject of many
wise adages of many civilizations; money or to be exact currency,
ours, the American dollar, otherwise known to many as
the 'greenback.' It maybe noteworthy that these days the value of the
dollar has its basis in perception rather than gold. Perception
describes it as among many others, global confidence in the currency,
our U.S. Dollar. Perception is after all very important or i should
say has been made so. Some might disagree but if you'd only look in
your garage you'll see that the reasons why you had been marketed and
sold on, your set of wheels isn't and hasn't been for quite a while
the primary reason it should be that it gets you from point A to B
and back again. Perception of our dollar has been historically
nothing but positive, certainly amongst our closest financial allies;
By comparison analysis based on past data the United Kingdom, Japan
and Germany together accounted for close to $700 billion dollars of
treasury securities(based on U.S. Treasury Dept/EPI financial
analysis '87). Today by latest estimates Japan alone accounts for
that much. Foreign interests in the U.S. account for over $800
billion in 2003 alone. To give the number a little perspective this
represents more than twice the amount put forth by the budget
committee for defense spending in 2004. 'A better bang for your
buck!' or so they say... Before it came to our attention that China
was in the midst of an industrial explosion, together with Hong Kong,
they were just shy, behind the Germans, in treasury securities
ownership. By latest and most recent estimates where do you think
China by itself stands today? One should be surprised if China hasn't
overtaken the Germans or even one of the top 2, UK or Japan to become
the biggest 3 holders of our debt. Yes debt our debt to be exact, one
that's fueled by going against an old adage of not spending more than
we make. They say that most good things have to come to an end, i
guess that applies too to the box of candy that i've savored its
variety with gleeful delight. There comes to a point where they say
the rubber meets the road... that prudent investors and financiers
of our debt will question our ability to make good on our borrowings
i.e. our ability to pay back our loans. Therein lies the piper's role
of risk assessing and management or the perception of it, whether he
sees lending to us maybe a more riskier proposition for him going
forward versus moving to other safer investment vehicles. (to be
cont'd)