Advice from the Oracle of the Ozarks

Last week, that economic guru Hillary Clinton warned that the sudden drop in market value, had exposed the fact that we’re too heavily invested in Asian growth – specifically that of China. Now, granted, she had turned a $10 thousand investment into a hundred grand in the span of a few days in the 80s, but her understanding of capital and investment markets, if at all like her husband’s seems woefully immature.

I remember that Bill Clinton declared the business cycle officially dead in 1997 proclaiming that his administration had successfully ended the ups and downs of market investing. Luckily, the brokerage houses didn’t close their doors on the announcement. Within a few years, the markets were headed south during his administration when investors discovered that the Clinton Administration intended to indict Microsoft in March 2000 and despite all of the yammering to the contrary, that administration wasn’t pro-business afterall. 

Of course they covered up the impending recession with totally unfounded claims that the Republican presidential candidates were “talking down” the markets. The economy was failing because of heavy taxation and a restrictive governmental environment and no amount of “talking up” was going to fix it. Business cycles were saved. 

I also remember in the eighties when all of the media outlets and Democrats were wringing their hands over the Japanese buying up our real estate. Everyone was so worried that the Japanese would buy up the whole country. Then the Japanese investors took a bath when the bottom fell out of the bond and real estate markets. They lost billions of dollars which impacted their economy heavily causing banking and investment reforms in Japan. And Americans still own the United States. 

Anyone who had the least bit of interest in the markets over the past few years knows that Asia has been making a load of money for those intrepid enough to invest there. Anyone with any common sense would realize that markets that go up, eventually come down. Pretty simple rule, huh? That’s why I pulled most of my international investments last summer. When markets as volatile as the Asian markets have been cooking for too long, it’s time to get out. Anyone paying attention to the tech market in the 90s knows that. 

So what if the Chinese are buying our debt in the form of bonds? Bonds haven’t been priced all that well lately and prices have room to fall. Its the Chinese that have to worry, not us. But you can’t explain that to communists – the ones in China or the ones here running for President. 

And when the Asian market was foundering last week, where did Asian investors put their money? In the US stock and capital markets. 

Category: Foreign Policy, Politics