US Dollar

Within the US, the dollar has held its purchasing power well since mid 2008. Now, with a ZIRP
still in effect and with the CPI recently hitting a new all time high, USD purchasing power is
starting to tick down. This will work a hardship on savers, who must put savings at risk to earn
higher returns. As well, folks who rely heavily on Social Security will be dunned, since the
rise in Medicare premiums is clipping the inflation adjustment for Social Security pay out while
earnings on savings are as near to zilch as you can get.

On my long term capital market line, cash equivalent investments are deeply "undervalued". The
super long term line has the 91 day T-bill currently fairly valued in a range of 3.1 - 3.3%. Lately,
the bill has had trouble earning 0.1%.

There are of course offsets. 401k and pension plan values have recovered sharply, so the value of
financial assets has improved overall. Even so, dollars not at risk are set to depreciate in value.

My old rule is that it makes little sense for foreigners to hold dollars when US purchasing power
is falling.