I read a lot of financial stuff on the Web, but I rarely reference it here because it would bore most people. But financial analysis has to have a context, a worldview that supports more detailed opinions. This advisory report has some interesting context:
The actors in world finance do not trust the United States. Who can blame them after what we have delivered to the world during the last two years.
There are other reasons for dollar weakness, too. Here is a short list: massive issuance of federal debt, dramatic and expansive federal spending programs, Obama policies that will hurt productivity, layers of government regulation on top of what is already in the pipeline, forthcoming tax increases that will ultimately take the top US personal-income bracket to somewhere between the rate in Denmark and that in Sweden. Denmark and Sweden rank number one and two among the most highly taxed and socially managed people and economies in the world. The US will be vying for the top position in 2011 if all the present offerings are enacted into law.
In some ways, investors should be neutral about this and similar issues. It’s just context that gives guidance to investing decisions. There’s money to be made in almost any circumstance. But as citizens …. well, that’s another story.