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It was the first time SNS expressed a cautious view on what is happening. People are confused, he said. It was odd to hear him say this. He is an optimist. But not this time.
This administration has too many projects on the high priority list. They are all important, I know. The country, however, is asking why we are not focusing on strengthening small business and the economy. Afterward concentrate on the social programs, nationalizations, and new wars the administration wants to pursue.
I was intrigued by a report by Wegelin & Co., founded in 1741 in Switzerland. In its letter to clients, the bank reviews US policies.
• The US is over-reaching overseas with military and government/regulatory personnel.
• The enormous debt, the anti-entrepreneurial policy, and the disproportionate efforts to intensify the regulation of small businesses are discouraging investment.
• The Obama administration is making exactly the same mistake as Franklin D. Roosevelt by believing in the possibility of an upturn caused by appropriate state intervention. Roosevelt deprived businesses of any hope of being able to make money again through their own efforts. The war saved FDR’s faulty policies.
• The financial crisis has given momentum to anti-capitalist and thus anti-market forces in the USA (and elsewhere).
• We live in a time of shifting power and influence in the world. The US is losing its global influence because of the loss of economic vitality.
For these reasons, the bank took “a general farewell of America” and announced it will stop doing business in the United States. It is also advising its clients to get out of all US securities. It ends the letter with a sad and emotional: “But for now, it’s time to say goodbye.”
SNS is right. We are confused and our travail has been noticed around the world. The dollar is slumping because too many investors are thinking like the Wegelin bank. We need to listen to our friends.
To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.
I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.
George Dagnino, PhD
Editor, since 1977
Ranked in the Top 10 for 12, 6, and 3 months for market timing by Timer Digest
Disclaimer. No material here constitutes "investment advice" nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.
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Deflation is alive and well. Producer prices declined 0.6% last month, down 4.8% over the past 12 months.
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