Nope I'm not kidding. People percieve Buffet as having the quality that everything he touches turns to gold. Obviously, Buffet's net worth (although would have a significant impact) would be a mere drop in the currency liquidity pool. But WHEN THE WORLD FOLLOWS HIS LEAD, we are in big trouble, wouldn't you say?
Currency Killers
- Thread starter ShoeshineBoy
- Start date
Nope I'm not kidding. People percieve Buffet as having the quality that everything he touches turns to gold. Obviously, Buffet's net worth (although would have a significant impact) would be a mere drop in the currency liquidity pool. But WHEN THE WORLD FOLLOWS HIS LEAD, we are in big trouble, wouldn't you say?
I agree, when the daily average on the currency markets is over 1 trillion US dollars traded....some guy with 28 Billion or so is just a drop in the ocean...even if Buffet was transferring over 75% of his net worth into other currencies it would just be a blip on the screen.
I can appreciate people with a few million wanting to appear rich, but in the grand scheme of things a million dollar trade is just the minimum for a ForEx interbank trade.
But look not at what his own personal leverage can do. Rather, look at the effect of people following his lead all over the world (when I say people,I mean institutions as well as individuals). That will be more than a drop in the bucket i think...
I agree with Darkhorse and jem. Even though Buffet may win he is less than a speck on a nats ass in the behemoth that is the currency mkts. Just as all mkts make perfect sense sometimes and no sense at others a perfect storm in the currency mkts can obliterate any size account. The major malfunction is that moves that are derivatives of purlely internatinal political power plays can decimate players smaller than governments, i.e. the currency mkts cannot be read from a purely biz point of view but must also include a political perception of a global scope. I'm sure he's not in deeper than he can cope , he's a bizman, but he's a niave politician demonstrated by his moronic suggestion that some Calif homeowners should pay more taxes. Oh yeah, that'll win you votes everytime.
Suppose every major investment bank and institutional investor decided to follow buffet on his hunch? How do you think that would affect the dollar?
Why would they follow him? Did anyone follow him on his $9 bil bond sale. No way.
Possibly but not likely.Keep in mind the US consumes 70% of the worlds exports.To varying degree,most industrialized nations are dependant upon US consumption to fuel their own feeble economies.Thats why I dont think you will see any major currency shifts or extreme dollar dumping.Globally, its in everybody's best interest for the current system to remain intact.Since the fed is wracking up the debt at obsene levels ,I wouldn't at all be surprised to see the dollar reach record lows.I'm not certain another currency would be able to replace the dollar in its current capacity.But how about the Yen and the Euro?Could gold be in the equation?Only time will tell.And Warren Buffet's influence seems to be for the most part, marginal at best.Its not uncommon for people to question many of his invesment decisions because he's usually buying in at the bottom, or near it ,when most others have walked away from that same in vestment.And holding for a lifetime,literally. But then again, if things get real bad ,his influence on the markets could have significance. Another good forum,thanks guys.
Very good point! Buffet buys at the bottom so a lot of people will be scared to jump after he does. I just thought it was interesting since it isn't every day you see the likes of Buffet speculating the currency markets (even if he holds these other currencies for two or five years, it would still be speculation....at least for Buffet, it appears as if two or five years is a very short time span compared ot his usual holding strategy). Do I think Buffet will be holding these foreign currencies forever? No way! I strongly believe he is speculating and moving away from his usual buy and hold forever strategy. For some reason, that is just the feeling i get....for whatever that is worth
does anybody know if buffett is still holding on to that 20 million ounces plus of silver he bought five or six years ago?
also: with everything he's got going on, he could be shorting the dollar to make himself delta neutral for all anyone knows- maybe he's got geico's float running the other way
also: with everything he's got going on, he could be shorting the dollar to make himself delta neutral for all anyone knows- maybe he's got geico's float running the other way