the quiet american dump

The stock market has had a 6.5% rally. However a handful of heavy weights have been quietly dumping their stock. Warren Buffet is one of those. He has been disappointed in earnings from companies like Johnson and Johnson, Proctor and Gamble, and Kraft Foods.

Buffet has been reducing his holdings in consumer stocks. With the American economy at 70% consumer spending, Buffet seems to have a lack of consumer confidence of his own. He's not alone.

John Paulson is clearing out his U.S. stock portfolio too. During Q2 of 2012 he dumped 14 million shares of JPMorgan Chase. George Soros sold all of his bank stocks.

Why a dump all of a sudden? Perhaps the professionals are aware of a big correction coming. A correction one economist has pegged at 90%. That economist is Robert Wiedemer, author of the best-selling book Aftershock.

Mr. Wiedemer correctly predicted the housing debacle of 2006.

One reason why he thinks a correction is coming is The Federal Reserve's money printing practice.

My feeling is that inflation follows. If inflation hits 10%, 10-year Treasury bonds lose half their value. 20% inflation means no value at all.

0 Responses to " the quiet american dump "