what to do now: cash or invest

It was interesting to listen to Frank Barbera and Gary Dorsch:

http://www.financialsense.com/fsn/main.html


Frank mentioned that Aug 15 was the day for normal withdrawals from Hedgefunds by investors and that this date needs watching for further news. He thinks that the injection of capital by Govts was partly designed to accommodate this.

International letter writers were referring to investors unwinding the Yen carry trade but I firmly was of the opinion that Japan won't allow that to a large degree as it wants a low valued currency: posts 186244 and 184246. They are supported by the US in the hope that these investors buy USD and invest in 5% Bonds (Japanese interest rates are only 1%).

The yen had strengthened to 117/USD and suddenly this decreased to 118.5 yen/USD. Dorsch mentioned that this had a positive effect on the DOW on Friday much later on. He would be correct.

Reference was made to Aussie M3 which is close to 16% and contributed to a difficult Australian market.

Everybody seems to think "there is more to come". As mentioned, I support the injection of capital by Central Banks and presumably this will continue. However, much of the infused cash tends to be withdrawn later so monetary inflation, although an initial problem will be less later on, accepting that most Govts already have a high M3 anyway.

My cash holding has declined to about 45% and I need to watch the scene unfold further. I have some cash in preference shares which pay a very good interest rate before tax, as well as Broker's deposits at call, again paying interest rates.

I am not allowed to advice on stocks but my favourites are BMN.ASX which suddenly sold down on Friday and the Gold/Silver stock GORO, an American company operating in Mexico.

Waiting for the TCF.ASX report at end of August and any positive news from other sources.


Gerry
Readers, please do your own research and you decide if and when to buy, hold or sell any stocks or metals/commodities.