Musings

5 November 2012 - 12:25, by , in Musings, No comments

With the election being tomorrow – the noise around the markets will reach a cacophony – “Who is the better candidate for the market?”, is a frequently asked question.  Who cares – each party is responsible for the debt and stagnant growth that we now face. Republican/Democrat doesn’t  matter, both useless.

With a government that now runs a massive budget deficit  (we borrow about $0.40 of every dollar spent). Neither party has a credible plan to resolve the US dilemma, it makes the situation in Europe look rather pedestrian. Even if we wanted to, we could not join the EU.  The Maastricht treaty requires a budget deficit 3%…

The good news is we have a cooperative central bank – they can continue to monetize the debt for a long time.  This debt situation will be with us for a looooong time. The debt situation is a chronic problem that is lacking an acute trigger that would precipitate a crises.  It is similar to an obese person – sitting on the couch, obesity doesn’t provide an acute trigger, escaping from zombies…

As an investor we can to look to the government for the rules that govern our investments – most importantly taxes.  The rules will change frequently, we must be nimble and thoughtful and seek out investments with a favorable growth profile that trade at reasonable prices, so that with a bit of luck we may get ahead.

I personally am looking forward to Wednesday and the calm after the storm.

About author:
Damien is the founder and owner of Lanyon Advisory Services and has a extensive knowledge and experience in financial planning and wealth management.

Leave a Reply