Harbour Road in Bo’ness was where I first encountered bogeymen. Harbour Road was the route to school and in wintertime most of the journey was in the dark. The road was dimly lit at the best of times. And it didn’t help that on one side was a dark hill covered in big black trees. That’s where the bogeymen lived.
Yesterday I drove up the road for old times sake. The hill and the big black trees are still there but look quite friendly now. What happened to the bogeymen? Well I reckon when they got fed up scaring wee bairns they became academics and economic experts. Now they scare investors. They thrive on our irrational fears which these days revolve around adult things like climate change, debt and recession and that’s just for starters.
Last week I read an article in Newsweek Accompanying it was a map of the parts of the Earth affected by climate change. The article confirmed climate patterns are changing dramatically, changes causing a drastic decline in food production more or less everywhere. They predicted the drop in food production will start ten years from the date of the article, and the evidence and support of these predictions had accumulated so massively, it claimed meteorologists were hard pressed to keep up.
Apparently this climate change was the cause of a devastating outbreak of tornadoes with 148 in the previous year killing more than 300 people and causing untold damage. The funny thing is it was all put down to global cooling. The article referred to was published on 28 April 1975! Back then the bogeymen were so concerned about falling temperatures in the World they proposed melting the Arctic ice cap by covering it – wait for it – in black soot.
How wrong can you be? And I have no doubt today’s climatic expert bogeymen will be just as wide off the mark. But why do they always get it wrong? Is it because they’re obsessed trying to prove a point to suit their theories, they ignore factors that don’t fit?
The bogeymen bury good news. Did you know Brazil has made two major oil discoveries in the last twelve months and will most probably be one of the top ten oil exporting countries in the World soon? Were you aware China made ten oil discoveries in the last twelve months?
You will be aware the US Dollar is plummeting. So how much do you think it has gone down in the last four years? 20%?, 30%? – actually right now it’s down only 7%. 2007 was apparently a bad year for stockmarkets according to the bogeymen. Isn’t it funny that US$10 trillion has been added to the World’s stockmarket values in the last twelve months. That’s the same amount as was added during the dot.com bull market years of 1995 – 1998, added together.
They tell us US consumers are struggling. Isn’t it funny not that long ago a European think tank concluded virtually every nation in European lags the US in income. In fact if the EU was a State in the US it would be 47th in earnings power equal to Mississippi.
The climate bogeymen today blame global warming for temperatures rising and temperatures falling. Record falling temperatures have hit South America but that’s because of global warming apparently. Economic bogeymen tell us we only spend money when house values are rising and that we cut back on spending when house values fall. What rubbish.
They tell us the US is heading for recession because house prices have fallen over there. Isn’t it strange that 32% of US households rent their houses. On top of that almost 24% haven’t any mortgages at all, and a further 35% can easily afford their prime mortgages.
The confident predictions of recession for this year are most probably unfounded. Eminent US bogeyman, Paul Krugman has incorrectly predicted nine recessions in the last six years. 27 times since 1982 experts have called for the end of the consumer. So far so bad! With the World economy expected to rise by 4.8% this year, the most experienced and patient investors see this for what it is – a fantastic buying opportunity.
Courtesy of The Scotsman, 26 January 2008.
