“ Gary , a newsletter I subscribe to and a website I read are both presenting many financial graphs about global investments to show how similar a situation we are in now to the 1929 collapse of the stock market. It’s impelling data. One site predicts we’re just days or weeks away from a major US stock market reversal that is the beginning of a long slide down. If that happens, and there is the inflationary depression they predict, markets around the world would crash in conjunction with the US market, so how would investing in other currencies be any help? Wouldn’t all currencies simultaneously depreciate against commodities in general and gold and silver in particular? “
This reader has a point. The art of choosing which currency to hold seems to be based not on figuring out which government is doing things right, but which is managing their currency less wrong. The idea is to choose the least wrong because the currency influenced by that government will tend to strengthen versus others.
This promotes the idea of having global investments and puts the US dollar at greater risk than most for at least three reasons.
First, the US government continues to spend billions, perhaps trillions in Iraq . This is not likely to be a productive investment.
Second, the US continues to buy more goods abroad than it sells. This by its very nature tends to push the US dollar down.
Third, the US has a crumbling infrastructure. Many bridges, buildings, roads, factories and such were destroyed in Japan , China and Europe during WWII. In the US they remained intact. Now they need to be fixed. Yet maintenance and fixing bring little political reward…not like protecting freedom (please feel a note of cynicism here).
So the bridge fixes have been put off, even when bridge inspections suggestion that the bridges were unsafe.
I have been thinking about this a lot since visiting my mom, daughter, son in law and grandkids in my home town of Portland and learning that the pre WWI and WWII Sellwood bridge is 82 years old and especially troubled.
“We don’t have unsafe bridges out there”, said Stuart Foster, chair of the Oregon Transportation Commission. “But Sellwood is an example of why we need to make more of an investment in our public works”.
Not unsafe? The Sellwood Bridge scores a 2 out of a possible 100 points on a federal bridge sufficiency scale, tied with two overpasses for the worst rating of any span in Oregon. By comparison, the Minneapolis bridge that just collapsed scored a 50!
Perhaps we should not be concerned since the safety agency has taken draconian measures and banned loaded cement trucks from the bridge. (Please note the cynicism here also.)
Needless to say I will not be driving across that bridge. This makes everything less efficient. Loaded cement trucks cannot cross the bridge so Portland construction is less efficient. Others won’t drive it either even though it’s the shortest route. That make them less efficient. The rot, the decay and the lack of maintenance is all money gone.
What the reader mentioned above is correct. These and may other problems will create inflation and push up the price of commodities…including coffee. Or should I ask, where has the 10 cent bottomless cup of coffee gone?
We’ll look at more problems pushing down on the dollar in upcoming messages but lack of space let inflationary thoughts lead us on to our English trip and the by now famous eight dollar plus cup of coffee. Actually the cup was $8.08 to keep the record straight.
The ten cent cup of coffee has gone along with the three penny first class stamp. I remember them as well as gas selling for 19.9 cents a gallon. Yet I believe that prices will rise much higher. Merri and I saw just how high on our English trip. Prices seemed outrageous and the epitome was a cup of coffee I had at one of a string of tea shops in Yorkshire . The shops are called Betty’s and they are good. Merri had a birthday and instead of cake I took her and Jake for a Yorkshire cream tea. They each had the tea, (very good), two fresh scones some strawberry jam, some perfect strawberries and some Yorkshire clotted cream. I had a filtered coffee (one full cup).
The food was truly great, the setting full of charm, but the price yowee! My coffee was four pounds. That is eight dollars. The total bill with a 10% tip was $50.50
Plus you can see from Betty’s coffee menu, the excellent Cuba Baracoa coffee I enjoyed was not the most expensive of the lot. I could have had a Jamaican Blue Mountain for $9.59!
The following specialty coffees are served in cafetières for one.
St Helena Island £4.75
This remote South Atlantic island produces a tiny but excellent crop of coffee, with sweet, fruity tones. Medium roasted.
Galapagos Island £4.20
This remote island in the South Pacific yields a tiny crop of rich coffee with an intriguing acidity and caramel undertones. Medium-dark roasted.
Jamaica Blue Mountain £4.75
The perfect balance of smooth body, mellow flavour, and fine acidity is well worth a try on special occasions. Medium roasted.
Sumatra Mandheling £4.20
The silky, almost chocolaty flavour is unique to coffees grown in the rich volcanic soil of Indonesia . Dark roasted.
Organic Matagalpa Mountains £4.00
Grown in the shade of the indigenous forests of Nicaragua , a beautifully balanced coffee with fruity undertones. Medium roasted.
Yemeni Mocha ‘Heights of Araby’ Ismaili £4.20
From the oldest commercial coffee-growing area in the world, a rare and exotic coffee with a deliciously piquant flavour. Medium-dark roasted.
Kenya AA Nyeri Hills £4.00
Grown on the foothills of Mount Kenya , this is a wonderfully fragrant coffee, with hints of blackcurrant and citrus fruits. Medium roasted.
Bosque Lya £4.00
From an award-winning farm in El Salvador , this coffee has hints of toasted hazelnut, milk chocolate and sweet vanilla. Medium-dark roasted.
Cuban Baracoa £4.00
A full-bodied coffee with a distinct nutty flavour from the Caribbean island of Cuba . Dark roasted.
(Note I picked a cheap one!)
Food is expensive everywhere. Rents sky high. Our daughter rents one bedroom in her Surrey home for the typical rent of $800 a month. Gas is $7 a gallon and transportation by rail stunningly high.
This is a picture of what can come. England is a special place because it attracts the wealthiest of the lot from all its previously colonized nations. This tiny island is overcrowded so high real estate and high tax means that the common man leads a sad grey life. This is the biggest battle of all, the fight between the rich and the poor. The spread between the rich and the common man grows. Those who adapt to the new global economy have more to look forward to than ever before. Those who do not… a lackluster existence.
Bettys shows how true this is becoming. They have a continual waiting list. (Some tourists but not that many!) Someone has money to spend.
This also gives us a clue about the benefits of investing in the top end. The wealthier grow less impervious to inflation because they earn from inflation.
We can draw some conclusions.
Invest in top line. Invest in companies that process commodities. I do not like the commodities themselves because they cost so much to buy, store and sell. Invest in shares and in businesses like Betty’s in more than one country!
Also seriously, if you happen to be in Yorkshire , I highly recommend a visit to Betty’s. The Yorkshire Cream Tea is outstanding and includes a pot of Tea Room Blend Tea, two Sultana Scones, strawberry preserve and Yorkshire clotted cream…only $15.00 or so. By the way this includes a pot of hot water also. (Please do not let anyone know…I used it to replenish my coffee!) But invest in some pounds now because if the dollar falls more this price will rise.
If you feel hungry try Betty’s Traditional Afternoon Tea for Two. This gives you a pot of Tea Room Blend Tea for two;
Smoked Salmon, Roast Ham, Egg Mayonnaise and Cucumber & Cream Cheese sandwiches; two Sultana Scones, strawberry preserve and Yorkshire clotted cream as well as a selection of miniature cakes. This I must say is a nutritional disaster, but at a mere $58.58 so what the heck!
If however you are feeling poor, have a Coca Cola. That’s only $4.24….for now. Things may not go better but “things evidently go cheaper with coke”! (Of course, this is worse than a nutritional disaster.)
Until next message, good investing!
We hope to share with you ideas about multi currency investing at one of our upcoming courses or correspondence courses.
Join us here and enjoy the beauty of the farm. We’ll even throw in a meal up at the farm at prices far below those you would pay at Bettys. How is FREE for a price. Plus though I am prejudiced, I’ll add that Merri’s food is better than Bettys as well. Here is a group enjoying the cooking process at a previous course.
Or join us in our Ecuador hotel where our chef at Quinoa Café can feed you exquisite food for a week on less than a meal at Bettys. Here is Chef Santiago (left) and our staff who would love to serve you.
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