longOnUranus Posted October 20, 2004 Report Share Posted October 20, 2004 I went to a ?banquet? (turned out to be a speech with refreshments) last night, featuring Michael Cox, Sr. VP of the Dallas Fed. It was put on by an investment advisor I?ve been talking to, who, it turns out, actually manages Dr. Cox?s money. This was a ?public? talk so none of this is confidential. I?ll summarize: His Power Point presentation was typical Fed bullhorn ? things are so good and don?t pay attention to the bad news. His thesis is that the American transition from an agrarian to a consumption society over the past 100 years has resulted in a standard of living, the likes of which the world has never seen. His arguments were entirely consumption based, relative to unit labor (not price)?you can get more now with an hour of work than you?ve ever been able to get before. Price (ie, ?inflation?) is not a large term consideration. What you get now, vs. then, for what you work. Period. No-comment on rates?or he?d lose his job. Enforced code of silence. He did say that he had no idea what rates will do. That last statement actually says quite a bit. He?s at every FOMC meeting, he says. On the deficit..?extremely concerned?. Seemed real concerned by his facials?he said nothing intelligible, really, but perseverated on the point for nearly a minute. Very odd. Absolutely no discussion on economic/social cycles?his arguments, predicions and extrapolations were entirely linear and historically based. Made the point that even with all the publicity China gets now, the standard of living in Botswana is actually higher. He made this argument based on cars per capita. I was astounded that he shared some of his investments with us...#1 investment: ENERGY!!! ?I made a (bunch?) on oil company stocks this year?. Very pro-tech, but in a futuristic sense. I think TI is his only current tech investment (reading between the lines) because of its RFID activities in Dallas, which is trying to become the RFID center of the universe. He was very up front about how Dallas blew the telecom sector and what little biotech we had. Very positive on investing overseas?a guy asked him a snooty question about the USD, and Cox floored him (and me) with his answer: commodity trends , EURO/USD, gold-oil /USD and a bunch of other largely Forex /consumption arguments to support the fact that a lower USD makes ABSOLUTLEY NO DIFFERENCE in the long run. (I?ll revise this with a better paraphrase when I get time). Lastly, I was amazed at his lead-off slide. Is he a Stoolie???? (Credit to Grot; Cox used the original donkey-cart picture, which I can't find on the internet at the moment): Link to comment Share on other sites More sharing options...
machinehead Posted October 20, 2004 Report Share Posted October 20, 2004 his answer: a lower USD makes ABSOLUTLEY NO DIFFERENCE in the long run. Yep. That's the conventional wisdom, not only at the Fed, but at the IMF, World Bank, BIS, etc. Floating exchange rates are wonderful and self-adjusting. No balance of payments crises. Sit back and enjoy the ride. A couple of decades hence, such unconcern about the dollar will seem as cavalier as the Thirties mentality of "liquidate the banks, liquidate the farmers, liquidate industry." "Liquidating the dollar" will not be the pain-free walk in the park they expect. And the Fed may not exist after it's over ... Link to comment Share on other sites More sharing options...
Hiding Bear Posted October 20, 2004 Report Share Posted October 20, 2004 Tanks. I didn't know that mere mortals could actually speak to the all knowing oracles of the Fed. Like MH said, they think the fiat dollar system is fool proof - but it was greater fool, AG, that told them that. Link to comment Share on other sites More sharing options...
longOnUranus Posted October 20, 2004 Author Report Share Posted October 20, 2004 one udder ting...for every question, Dr. Cox had a perfect Power Point mini-presentation to respond. I think there is no question in the world that he has not heard and is prepared to respond to. The treat was, though, being able tp see the contents of his presentation folder, as he scrolled though to find the appropriate reply to a question (he did this several times) . Had to be at least 100 files. Some cryptically titles, some not. I saw a metals file, along with expected fed funds and tech stuff. I was searching for a 990N file. Alas, I did not see it. If microprocessors could talk... Link to comment Share on other sites More sharing options...
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