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Discussion Starter #1 (Edited)
At the bottom of this post, I have provided a link to a recent speech by Ben Bernanke, the Chairman of the Federal Reserve.

After reading it, I am not sure I will not have to re-read it several times to digest the confluence of negative comments. To have the Fed Chairman, one of the most powerful and influential financial people, state the same Doomsday picture that bloggers, who were considered kooks not long ago, have been saying for years, is mind boggling.

The US is already bankrupt and is heading over the cliff.

Only the most draconian measures will offer a solution to avoid a US default on their obligations, both to foreign buyers of US debt, and to their own citiizens for promises that won't be kept........in fact, can never be kept.

Mr. Bernanke basically states that the US will continue to borrow money at an unprecedented and increasing rate. They will stop when they are forced to by other countries unwilling to continue to bail them out.

Social Security is a sick joke on the millions of retirees who will never get their money, or may receive it in US dollars that are worthless. There is no social contract to guarantee what the dollars will buy. When the Fed plans to deliberately drive up inflation.........retirees earning a fixed income will be among the most hurt.

What we can take from Bernanke's speech as Canadian investors is to avoid any Canadian companies that depend on exporting to the US. That source of profits is going to be completely gone.

If what Bernanke opines is true, gold may be the place to invest.

On another article I read a breakdown of the US deficit and budget. In order to balance the books, the US would have to eliminate defence spending, and drastically reduce their social security, and medicare obligations. The US has dug themselves into an impossible situation and they are going to drag us down with them.

We are now witnessing the beginning of a currency war, as each nation seeks a lower currency to protect their exporting economies. It is a race to the bottom.

It is only going to get worse from here on......buckle your seat belts and invest wisely.

http://federalreserve.gov/newsevents/speech/bernanke20101004a.htm
 

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What we can take from Bernanke's speech as Canadian investors is to avoid any Canadian companies that depend on exporting to the US. That source of profits is going to be completely gone.

If what Bernanke opines is true, gold may be the place to invest.
ah, gold all ready is the place to invest

and maybe avoid any company in the usa since your investment will be returned in much less valuable us dollars

and then there's this from alan greenspan: http://www.bloomberg.com/news/2010-10-08/greenspan-says-u-s-engaged-in-dangerous-game-as-debt-deficits-increase.html

go read zero hedge if you want to find out what the "loonies" are saying
 

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I would be interested in knowing how many of you out there have eliminated all of, or drastically cut, your direct U.S. equity investment allocation in light of all of the doom and gloom out there about the American economy going forward. I am not referring to Canadian companies who may happen to do business in the U.S. but rather U.S. based equities.

For exaample, are you shifting your allocation, more and more towards emerging nations and away from the U.S.?

What are your current Canadian, U.S., International, and Emerging Markets equity allocations?
 

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Bernanke - Bankrupt US
This is pure madness.
What happened to the stock markets today is pure insanity, madness.
There are deep and serious issues with the world economic system right now.
The US, Europe and to a lesser degree Canada is accentuating the madness by the monetary policy.
The jobs report in both US and Canada was ominous, to say the least.
Inspite of the that (or rather, because of that), the market is expecting further QE from the US govt. and thus the stock markets both sides of the border rallied.
QE and other instruments of monetary policy adopted to further lower borrowing costs to stimulate spending is insanity.
The US is getting itself and its residents further and further into consumer debt.
The Canadian govt. cannot raise interest rates aggressively because of the strength of the CAD.
All countries are in a currency war - but the objective is not to gain world supremacy this time but simply to keep domestic borrowing strong.

I don't know where we are headed, but this is insanity.
These guys are completely ignoring basics of capitalist economics and history.

To answer BG's question, I personally have almost no direct US stock market exposure, but I'm sure I have lots of indirect exposure.
The US is still the central economy of the world and influences everything.
 

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Discussion Starter #5 (Edited)
It surely is madness...........

Knowing all these facts, or do they have any inkling about the economic world about which they report, the talking heads on the US business channels do cartwheels every time the stock market rises a little. They grab some business guy who says he thinks everything will be ok..........or stocks are cheap......or some other such dribble..........and everyone has a happy face. They seldom discuss the overhanging issues with social security or medicare, or the debt that can never be repaid. They never discuss the terrible pain that is going to be inflicted on the populace as the world around them collapses.

What is the saying.........something evil this way comes..........

For a little comic relief, here is a link to Peter Schiff light heartedly explaining the craziness of it all.

http://www.youtube.com/watch?v=NkEtArDFNYA
 

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I don't think its as bad as everyone thinks, to be honest.

What makes it bad is negativity.

People like to stay rich, especially Americans and their Government.

They'll find a way to cure it... stop worrying and start dollar cost averaging.
 

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The question I want to answer is what will Canada do? If governments are all printing money to inflate their way out of debt, how will Canada fare if it does not join the club?

I know that with Nafta, we are linked to the USD. This became obvious to me because I track Mexican Peso exchange rates and our rate has been 12.3 pesos per C$ during all these swings of the value of the C$ is USD terms. Same rate this year as last because we spend 7 months in Mexico.

However, the C$ has declined from 0.755 Euros to 0.71 in just 2 months. This in spite of all the trouble with PIIGS. This inflated our costs during the last month while we were in Europe.

So yes I am maintaining my USD exposure. And I continue to hold a large cash position waiting for some buying opportunities although mostly in C$ and emerging markets. I am also going to increase my allocation to health care and that is primarily US.
 

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i tend to agree with harold crump, we are in a serious pickle in that we are over levereged .... things are not worth in fiat currency what they "appear" to be worth

so, how do we unwind all of this debt ?

i have no idea but i know that we are in perilous times and any spark could ignite a big fire (the foreclosure corruption ?)

i also think there is a huge, immense possibility for a massive bull market if we could resolve some of these issues

i think a world currency is on the way .... some kind of new actual currency or basket of reserve currencies

everyone is looking for the one thing they can rely on to be solid and stable (i.e. gold going way up but it is a lousy choice for stability)

it used to be the us dollar but since that is now being questioned, all bets are off and it's making everyone nervous
 

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This may go against some of my other posts elsewhere on this forum that support the argument for investing long term in smallcaps as opposed to largecaps.

If the world is going to hell in a handbasket, it will be better to invest in large companies with a strong balance sheet that can best weather any coming storm and emerge out the other side still in business.

For this reason, it might be prudent to now tilt away from small caps towards the larger caps.
 
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