I am retired and take educated guesses on all things financial.

October 22, 2006

October 23,2006: Strategic enemies and stocks

This post is going to ramble. Please indulge in patience.

It is my view that no matter who comes out ahead in the upcoming general elections, the United States will still have the same strategic enemies. China #1, the so-called Muslim cluster #2 (wherever Islam reigns supreme)which is now being grouped together by our military, Russia and the adjacent vassal states #3 and the Axis of Incompetence - my term- #4 encompassing Venezuela,Cuba and Nicarauga/Bolivia/Mexico.

Outside of China,presently in an undeclared technology and arms race to surpass the United States by 2015 and lately blinding our intelligence satellites over her terrority with lasar bursts and launching unprecedented cyber attacks on defense and economic targets in the United States and Japan, the other strategic enemies have a common purpose - to weaken the power and influence of the United States to make the world safe again for despots and the crushing agony of pseudo-communist state control. Another reason to lessen the United States is to promote anti-competitive economic policies. Simply, these strategic enemies acknowledge that they cannot compete economically with the United States on equal terms. THEY HAVE TO CHEAT. For example, intellectual property rights are nonexistent in much of the strategic enemy world. The United States is loosing hundreds of billions of dollars having intellectual property stolen. Oil is carteled, Central and South America, especially Mexico, encourage human cargo to enter the United states, exporting their economic malaise and hoping to reap the benefits of "money from the states" to their impoverished families living under corruption or worse. Russia is swiftly going down the road to what is called "communist light". If you are against Putin and have a voice, it will be silenced.Capitalism, Russian style, is fine - if you pay off the right government ministers and serve the interests of the State.

You will notice I did not include North Korea in the above paragragh. They are but a puppet and proxy for China. Make no mistake. Once the United States closed most of the immense, high quality United States currency counterfeiting operation of North Korea and assisted by China in 2003, North Korea became irrelevant. The nuclear issue is more a product of China and Iran than North Korea. The United States military does recognize that the present leader of North Korea is mentally rancid, and thus had to prepare a basic anti-missile shield which is now 100% operational in Alaska and California and in the air on special 747 laser-equipped aircraft, just in case.

What does this do for stocks?

I think that it does present opportunities for the astute investor. I believe that Aero-defense will play a dominant role over the next several years as our ground forces pull back significantly from the Middle East (see previous posts on this opinion). Please look at my past blogs on Aero-defense stocks for names and scenarios. As the United States begins to appease rather than confront those wanting to weaken our democracy and economic powerhouse, I think that the Claymore BRIC (Brazil, Russian, China and India) ETF will do very well and also mitigate the risk of individual stocks and, perhaps, an economic failure or two in the aforementioned countries.I have previous posts on this fund and bless it. If India seems a bit under-represented in the BRIC fund, I recommend purchasing shares in Icici Bank (IBN), which has performed under expectations but should do very, very well long term. The natural resources of the Middle East and South America will be compensated for by additional drilling in previously "untouchable" areas off our coasts and through shale and oil sands, and, perhaps, coal and synfuels. The public will demand fuel, and caribou be damned at that stage. See my previous posts for some ideas in oil, including Suncorp (SU), PEO, etc.

That said, I look for the bull market to continue through 2007. Just be selective on your stock/ETF picking and be well versed on world events, which means reading, listening and blogging unbiased news (that pretty much excludes all mainstream media)in lieu of pure stock research reports. Political events will be driving the next leg of the market and gridlock in Congress will be a good thing.

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