Vote of no confidence

[jay]

Effective today, I have moved the bulk of my retirement savings (401k-equivalent) out of blue-chip US equity index funds into European and Asian index funds (like Barclay's EAFE index). I'm leaving some amounts in Treasuries and small-cap US index funds, as a buffer and for balance.

This isn't just putting my money where my mouth is -- I believe that the US dollar will continue to weaken against other currencies, given the policies of the current administration. And if other countries grow tired of financing our deficits, the dollar will drop even further, possibly leading to a fiscal crisis over the next few years. All the foreign markets have to do is not sink far, and I'll still profit from them (in dollar terms).

Not that my paltry $200K will make any difference, but it is effectively a vote of no confidence in the Bush administration's economic and fiscal management...

Comments

[joedecker.livejournal.com]

Certainly always difficult to predict macro trends, and the USD has fallen a bunch, but y'know, I suspect you're right that we'll end up seeing further devaulation of the dollar against the Euro et al. Warren Buffet of Berkshire fame has been moving a lot of BRK's substaintial "cash and bonds" positions (around USD $50B value) into a basket of five unnamed non-USD currencies.

[brian1789.livejournal.com]

Even as far as the dollar has fallen against the euro, the pegs maintained by Asian economies are likely to force even more euro-demand... sort of exporting their share of currency-revaluation to Europe. For now, IMO they'll have to float or revalue at some point.

Macro trends... I just don't see anything favoring a strengthening of the US dollar over the next 12-24 months. And politically, the rest of the world is likely to be less inclined to bail out Bush II than had the election gone otherwise...

[purpletigron.livejournal.com]

Have you heard suggestions that the dollar has only fallen half the distance that it's going to cover? The basis for that statement seems rough-and-ready to me, but still.