Earlier this week, I was sitting watching the second-most commercial celebration in the United States. Halloween is the second-most celebrated day after Christmas. Americans reportedly spend more than $3 billion on this event alone between candies, stickers, costumes and decorations.
It's ironic if you think about it – one day celebrates a holy event while the other signifies ghosts and devils.
What was fascinating was watching the various costumes of kids as they rolled by. We had more than 100 kids come by and each was quite creatively dressed.
While I enjoyed the ghosts, goblins, fairies and butterflies, I could not help but think about the carnage that was occurring across the Asian financial markets, which led to Tuesday's bloodshed on Wall Street.
And I cannot understand what has changed.
Last week, after a real long time, we finally saw the Europeans gather around and make up their collective minds on rescuing Greece and others by announcing a $1.4 trillion rescue package. And this was after being forced to create this package to assuage global worries.
And the world celebrated by rallying for two whole days. And then the world came crashing down again. Monday and Tuesday have been the complete opposite to last week’s celebration.
The euro went from 1.36 to the US dollar to 1.4250 and has come crashing back down to 1.36. Round trip with nothing to show except battle fatigue.
While I am opposed to the Greek bailout and everything bailouts stand for, I was glad that the worry-warts of the world (traders) would calm down and earnest news would start to make the rounds. And the earnest news I was hoping that would catch everyone’s attention – the $14 trillion deficit in the US and the rapid pace it continues to grow at.
The Super Committee has less than three weeks to come up with some real honest spending cuts. In the current partisan environment, I find it hard to believe that they would agree on what to serve for lunch while they meet, leave alone real reforms and cuts.
The dollar rallies as if it is a safe haven and the hapless yen is getting aid from the most misguided Central Bank in the world. Frankly, can anyone explain to me how buying the yen is a rush to safety?
If there is one nation that has worse statistics (debt to GDP, overall deficit, GDP growth, deflation rates) to the USA, it is Japan. And yet when there is an artificial scare in the world, the traders run to U.S. Treasurys, the U.S. dollar and the Japanese yen.
The traders of the world have all gone mad!
I am continuing to see signs of taming inflation across the Asian part of the world. Growth is creeping back and balance is being achieved.
I would keep my eyes on the prize – healthy balanced growth (real growth not lies) and currencies that are significantly better managed with real assets (India and China continue to buy gold by the bucket loads).
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