30 years from today, I'd like to come back and re-read this particular post.
UMB Scout Funds recently had an excellent market commentary on their perspective on the recent financial blow up and the longer term implications. Here are snippets. It's truly brilliant and I agree with their analysis.
From a longer-term view, we feel that the economy is beginning a debt super-cycle contraction. We stand firmly in the camp that a secular shift is occurring within the U.S. economy which will have significant effects on the sustainability of final demand and a shift away from debt-created consumption towards investment.
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we expect the growth in consumption to be negatively affected both by baby boomers attempting to increase savings and consumers struggling with debt repayment. This is likely to lead to less growth stability than we have seen for the last 20-25 years.
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Longer term, we believe a seismic shift has begun where the soil which spawns capital and wealth creation will be more fertile in many overseas economies than in our own. That being said, we maintain our view that, over the long run, the dollar will continue to weaken against many foreign currencies. The dollar’s reserve currency status may not be under attack within the immediate future, but it may be forthcoming, adding pressure for investors to favor foreign holdings.
Source: Click here.
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