<am watching capital chase capital markets and not be put to work in productive assets. >
Joan, all capital is put to work in what people think are productive assets. So capital can't just chase capital markets, because those capital markets are lending money to people who think they can do something useful with it, loaned by people who think the borrower has got sufficient collateral to pay it back and sufficient income to pay the interest on the money.
Nobody borrows money for no reason [except I did once, misunderstanding the tax law here, which resulted in me borrowing, at high interest rates, and lending money, at lower interest rates, simultaneously, which was not a good idea]. Even in my stupid case, the money was still loaned on to somebody who did know what to do with it, so it was being put to good use.
Not many people borrow money, pay interest on it and merely stick it under the mattress.
When one chases capital markets, one is thinking that those people borrowing it know better what to do with it than one does oneself. I'm currently in that position. So is Jay. Sitting on hoards of cash, lending it to banks, who lend it to home buyers [borrowers], car buyers, CDMA service providers who think they are doing something good with it.
Like Jay, I am wondering what the heck to do with it, sitting paralyzed looking for an opportunity to strike gold so to speak, though of course I would never seek gold literally, just figurative gold in the world of Biotelecosmictechdot.com shares and other 21st century non-Aztec stuff. The Inca and Aztec empires have gone and aren't coming back. El Dorado is old-time.
The zippy new world is where the action is.
But I'm chasing the capital markets until some great new opportunity looms out of the mists of confusion. Plus, it feels a little bit safer than in markets that wouldn't compete with 5% interest rates, which are bound to return.
That's my half-baked theory for the day,
Mqurice
PS: The NZ$ has moved from US38c to US58c in a couple of years. That's quite a long way. 50% in fact. Maybe it has gone a bit too far and it's time to retreat to US$? On the other hand, the $NZ did get to 69c a few years ago, before heading into that slump, so maybe there's more to go. Interest rates are high. |
