Thursday, March 23, 2006

Inflation or Insolvency

Howdy, this blog will cover thoughts and ideas about the future of capital markets and investment opportunities. Readers are reminded to do their own research and not to breathe asbestos dust.

My views on long term trends for the US economy is based on the currently unsustainable high levels of capital outflows from the US as represented by the foreign held public debt and massive trade deficits. At some point the only solution to the debt crisis will be inflation or insolvency. I believe that I can predict which choice “Helicopter” Ben Bernanke will choose.

For the individual investor, the best investment choices will be those investments that can return real income, those that bring capital back into the US via exports, and those that will profit from the tend of capital outflows from the US. Given the increasing levels of indebtedness at all levels of society, businesses involved in the origination and servicing and collection of debt will also prosper.

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