Skousen Investor CAFE: World Economic Issues Could Imperil Savings of U.S. Investors

By tcane

The world seems to be closely intertwined these days. The economies around the globe meld together and can affect U.S. investors dramatically.

The interconnectedness is one reason why I travel internationally to scout out new investment opportunities. I like to talk to people in other countries and to see first hand how economies around the world are faring. There is no substitute for conversing directly with business leaders, political leaders and consumers in countries near and far to learn what really is happening.

My travels have given me helpful insights in recommending stocks and funds to provide investment recommendations to the subscribers of my monthly investment newsletter, Forecasts & Strategies, as well as my three weekly trading services, Hot Commodities Alert, Hedge Fund Trader and Skousen High-Income Alert.

This week, I am heading to the exotic country of Morocco in North Africa for the Mont Pelerin Society meetings that attract some of the world’s top economic thinkers. I will report on the highlights of the event in next week’s e-letter, particularly about the outlook in the Arab world. An unprecedented outpouring of interest in freedom has swept across the Middle East and spurred many people throughout that region to stand up to oppressive regimes. In their quest for new leadership, many citizens in countries such as Egypt, Libya and Syria have been wounded or killed as they attempted to express their desire for freedom. The situation in Syria remains precarious and definitely could have implications for investors, especially if the country plunges into anarchy. The regime of President Assad appears likely to fail sooner or later, after his continued campaign to direct the nation’s military to fire upon and to kill its own citizens.

At least Morocco seems to offer an attractive destination, among Middle Eastern and North African nations. I spend many weeks a year traveling and I am grateful that my wife Jo Ann understands the nature of my work. I will try to mix a little business with pleasure to celebrate my 39th wedding anniversary with Jo Ann by taking her to Casablanca for a romantic evening at Rick’s Café. If you have seen the movie “Casablanca,” you do not need to ask why I want to take her there.

I’ll have a report next week fromFez, the ancient capital of Morocco.

Meanwhile, I also will keep monitoring the European debt crisis, which is weighing down global markets. The first debt basket case wasGreece, thenItalyand nowSpain. Spanish interest rates are soaring again, and now exceed 6%.

“We’re back in crisis mode,” Rabobank reported. “It is looking more and more likely that Spain is going to have some form of a bailout.”

Leaders around the world need to realize that heavy debt comes with consequences. The upcoming U.S. elections will offer voters a chance to decide who they entrust with their future and those of their children and grandchildren. The future value of our savings may depend on the outcome of the election and whether we have a president and a Congress able to rein in the runaway federal deficits that now reach $1 trillion annually. At least in America, we have elections to let us bring in new leadership without putting our lives at risk to do so.

“You Blew It!” — The World’s Greatest Golfer Falls Short

“No success can compensate for failure in the home.” –David O. McKay

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I just finished listening to the audio book, “The Big Miss,” by Hank Haney, “Tiger” Woods’ coach in the 2000s.  Haney candidly recounts the ups and downs of Tiger’s life and career on the PGA tour. Haney considers Tiger Woods the greatest golfer ever. Tiger is great, but until he beats the “Golden Bear” Jack Nicklaus’s record of 18 major victories, his greatness will be overshadowed. Tiger is stuck at 14 major wins but still has the potential to pass Jack.

In painstaking detail, Haney reveals the thrill of victory (especially the 2008 Torrey Pines championship which Tiger won despite a ruptured ACL) and the agony of defeat (his highly publicized affairs and divorce).  What amazes me is how the stoic, disciplined, hard-working Woods could meet the most demanding challenges on the greens but couldn’t control his appetites off of the links. He seemingly could achieve anything when he put his mind to it. It’s tragic that he couldn’t give the same devotion to his wife and children, and now he is paying a heavy price for this personal failure. He could have learned much from my two favorite golfers: Jack Nicklaus, who is happily married to his first wife Barbara (with four children), or Arnold Palmer, who was married for 45 years to his first wife Winnie (no children) before she died of cancer in 1999 (he remarried in 2005 to his wife Kit).

It’s also tragic that Tiger Woods’ interests are so narrow — golf and sports mainly, and the military. (Haney reveals that Woods wanted desperately to be a Navy Seal.)  Tiger does have a charitable foundation, but he apparently has no interest in art, literature, science, history, philosophy, religion (well, maybe Buddhism). He would be bored at FreedomFest, the libertarian conference that I organize in Las Vegas each July. That’s the downside of raising children to be super jocks.  They are seldom well rounded.

Woods also needs to learn basic social skills, according to Haney. I well remember the one time I met Tiger at a Magic basketball game in Orlando. He was sitting behind me with a few of his friends, Mark O’Meara and Ken Griffey Jr. O’Meara and Griffey were outgoing and talkative, but Tiger said only one word the entire evening. I asked him, “So I hear you have moved to Orlando?” He said, “Yep,” and that was it.

Yours for peace, prosperity, and liberty, AEIOU,

Mark Skousen, Ph.D.
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