Wall Street Could Have Learned Lots From This Kid!

If Wall Street hedge fund managers, derivatives traders and mortgage loan officers had just followed this kid’s money philosophy, we could have avoided the financial and economic mess we are now in.

Yes friends, instead of buggering around with bailouts, handouts, TARPS, FARTS and what have you, we could have continued to enjoy high property prices, high stock prices, ever higher oil and commodity prices and ...low interest rates. What a great life it could have been.

But it was not to be. See what message you get out of this little piece sent to me from a fellow fly in the Middle East (yes I have relatives there as well).

A young boy - say we call him Ali - enters a barber shop. The barber whispers to his customer, “This is the dumbest kid in the world. Watch while I prove it to you.”

The barber puts a dollar bill in one hand and two quarters in the other, then calls the boy over and asks, “Which do you want, son?”

The boy takes the quarters and leaves the dollar in the barber’s hand.

The barber says to his customers, “What did I tell you?. It happens all the time. This kid never learns!”

Later, when all the customers leave, the barber comes out of his shop and sees the same young boy coming out of the ice cream store. The barber says to him...

“Hey, son! I’ve wanted to ask you for a long time. Why do you always take the quarters instead of the dollar bill?”

The boy licked his ice cream cone and casually replied,

“Because the day I take the dollar, the game's over!. No more audience for you and no more free ice cream for me”

The message is “Wall Street could have fooled all the people all of the time – but for their stupidity and greed.”

Why US Dollar will remain World Reserve Currency!

Even with Obama in the white house, the ever popular Dollar bashing is on again. We keep hearing that countries around the world want to replace the US currency with something else as their reserve currency...but what.

Sitting on a wall in the newsroom of a major television studio, I heard that several countries will be meeting (again) soon to discuss alternatives and that central banks will start selling the dollar in favor of something else...again what it will be is not certain.

We hear comments like “Chinese officials have sought a greater role over time for the International Monetary Fund’s unit of account, known as Special Drawing Rights in an effort to reduce the dollar’s dominance. We also hear stuff like “Chinese official said he was not aware of a plan to discuss a new reserve currency at a Group of Eight meeting next week.”

What a load of crap and bollocks: Probably perpetuated by professional market makers to create volatility in currency markets so it’ll lead to more trading and of course more commissions (or spreads as it’s now politely called).

Here’s my take: if and when non US central banks start selling US Dollars aggressively... watch carefully and wait to start buying USD against other currencies - particularly the currencies of those countries who’s central banks are the most aggressive sellers. Central banks are notoriously famous for getting it wrong. Historically they've always sold at the worst possible time.

No doubt many countries around the world - particularly those who have a few extra coins jingling in their emerging market pockets from selling crap to US consumers, would like to see the power of the US Dollar and thus the US of A significantly reduced.

That’s just wishful thinking. I say that in spite of all the so called fundamental reasons as to why the US Dollar should be weak and therefore sold - it will continue to remain the world’s reserve currency for just one simple reason i.e. every single US Dollar is backed by at least 120% of solid military capability. No other currency in the world or even gold has that going for it.

Now I don’t know about you but I’d like to keep my money in a well protected place. Remember that when pull comes to push, the winner is always the guy with the biggest club... and uncle Sam has the biggest one of them all. Notice how US Dollar denominated Treasury Securities get bought up like mad every time some tin pot madman threatens to destroy the world?

My message to all nations? Just get on with building and improving your economy and work towards making your peoples livelihood better. Let uncle Sam police the world and keep your money safe from the likes of guys like Saddam, Kim Jong Il (he’s ill anyway) etc.