Czech Koruna

The chart depicts that the US dollar has more than cut in half against the Czech koruna over the course of this decade. The Czech koruna? Really? Apparently so. The Czech Republic is one I keep tabs on because Jyske Bank covers it closely and writes about it a couple of times a week and I read Jyske’s commentary every day. The Czech Republic certainly has its issues. It is a deficit country, with the deficit getting larger, inflation has recently broken to the up side, they don’t corner the global market in something the rest of the world needs, the stock market has participated in the global sell off dropping 18.5% from its high last fall so there doesn’t seem to be much in the way of standout information. Yet the koruna has more than doubled. It has a trade surplus with the US that has been growing maybe that is part of the equation? In 2007 GDP grew by over 6% so that might be it too. I certainly do not have all the answers but I think this more about strength in the Czech Republic than weakness in the US. One reason to draw this conclusion is the koruna has gone up a lot against the euro during the same period it is up against the greenback. This might be consistent with something I have theorized about before which is that there will be many countries that one way or another become more important in the world economic order. This could mean a country goes from completely irrelevant up to merely unimportant but still becoming more...

Czech Koruna

The chart depicts that the US dollar has more than cut in half against the Czech koruna over the course of this decade. The Czech koruna? Really? Apparently so. The Czech Republic is one I keep tabs on because Jyske Bank covers it closely and writes about it a couple of times a week and I read Jyske’s commentary every day. The Czech Republic certainly has its issues. It is a deficit country, with the deficit getting larger, inflation has recently broken to the up side, they don’t corner the global market in something the rest of the world needs, the stock market has participated in the global sell off dropping 18.5% from its high last fall so there doesn’t seem to be much in the way of standout information. Yet the koruna has more than doubled. It has a trade surplus with the US that has been growing maybe that is part of the equation? In 2007 GDP grew by over 6% so that might be it too. I certainly do not have all the answers but I think this more about strength in the Czech Republic than weakness in the US. One reason to draw this conclusion is the koruna has gone up a lot against the euro during the same period it is up against the greenback. This might be consistent with something I have theorized about before which is that there will be many countries that one way or another become more important in the world economic order. This could mean a country goes from completely irrelevant up to merely unimportant but still becoming more...

A Social Thumping?

I had a moment of clarity on the stairmaster yesterday that while I am far from early on this thought, it is grim for society nonetheless. Based on various things I read and anecdotal observations I am convinced that baby boomers (I am using this term for economy of space, not for rigid age parameters) is going to spend beyond their means, looting their nest eggs and one way or another to end up living for years way below the lifestyle they tried to save for. This will cause various strains on the system that I cannot quantify. I have read about this before obviously but for whatever reason it just now struck a chord with me. Plenty of folks have offered explanations as to why this might happen but I am not sure it is something that needs to be explained. Most people know they need to watch what they spend, they know the market can go down every now and then, can grasp how the numbers work but just as that is true many people end up living $100,000, or more, lifestyles when they can only live $80,000. The $20,000 doesn’t sound like much of a difference but two or three years like that combined with a 10% drop in the market and the odds for failure now go way up. How many boomers do you think have retired since 2003 (rhetorical question, I have no idea)? Anyone who has spent too much in the last couple of years is now probably relying on the market to bail them out over the rest of the year. Maybe...

A Social Thumping?

I had a moment of clarity on the stairmaster yesterday that while I am far from early on this thought, it is grim for society nonetheless. Based on various things I read and anecdotal observations I am convinced that baby boomers (I am using this term for economy of space, not for rigid age parameters) is going to spend beyond their means, looting their nest eggs and one way or another to end up living for years way below the lifestyle they tried to save for. This will cause various strains on the system that I cannot quantify. I have read about this before obviously but for whatever reason it just now struck a chord with me. Plenty of folks have offered explanations as to why this might happen but I am not sure it is something that needs to be explained. Most people know they need to watch what they spend, they know the market can go down every now and then, can grasp how the numbers work but just as that is true many people end up living $100,000, or more, lifestyles when they can only live $80,000. The $20,000 doesn’t sound like much of a difference but two or three years like that combined with a 10% drop in the market and the odds for failure now go way up. How many boomers do you think have retired since 2003 (rhetorical question, I have no idea)? Anyone who has spent too much in the last couple of years is now probably relying on the market to bail them out over the rest of the year. Maybe...

More Draw Down Dilemma

Develop A Contingency Plan For Retirement – Features Here is a quick read about the draw down dilemma retirees face. it cites the 4% number as a good starting point but points out how the number could go up to 6% in a very bad case scenario for equities. My answer to this has always been; whatever you got, 4%. My answer probably means you don’t run out of money but does mean that a meaningful pay cut is in the offing after a bad year or three. That scenario would also have to be mitigated of course but part of that solution is behavioral–depending on your specific situation it could all be behavioral or none of it but mostly likely somewhere in...