August 19th, 2009, 9:20 pm. Posted under Trade Alert !! by AppleOption.
Found in the New York Times, Warren Buffett wrote this about the economy…
Enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself. With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can’t come close to bridging that sort of gap.
To understand this threat, we need to look at where we stand historically. If we leave aside the war-impacted years of 1942 to 1946, the largest annual deficit the United States has incurred since 1920 was 6 percent of gross domestic product. This fiscal year, though, the deficit will rise to about 13 percent of G.D.P., more than twice the non-wartime record. In dollars, that equates to a staggering $1.8 trillion. Fiscally, we are in uncharted territory… Unchecked carbon emissions will likely cause icebergs to melt. Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar’s destiny lies with Congress.
If you are a INDIVIDUAL investor… You would be extremely wise to move your money to the sidelines (ie. cash or inflation protected securities).
The market is just as unstable as it was back in November… we just have a few Trillion of government money dumped into it. Just waiting for someone to cash out! Individual investors are never protected in this market, so you ride the trend and get out before the big boys do. I would not be surprised to see a sell off between now and January that may make the last sell off look small.