This week's essay is from my good friend Louis Gave. He writes about the current situation in France, offering a very different perspective than we have been seeing in the Western papers. I have long been uneasy with the demographic problems in Europe. My book, Bull's Eye Investing, high-lighted some of the very problems we are watching unfold now. Sometimes to understand the world of investing, you have to have a grasp of the world of politics and society. These are part of the fundamentals that drive our portfolios. I suggest you read this letter with your thinking caps on.
But before we jump to Louis's essay, let's look at a few words from Dennis Gartman this morning on the same topic. If you wonder why the dollar is getting stronger when we have such serious fiscal and trade imbalances, and in which all other currencies in history having reached said imbalances fell sharply, then ponder the words of the writers. Where does long-term capital feel the most safe? In spite of the imbalances, which should concern anyone, the answer is the US. That may say more about the world than any other thought.
I must say Paris is one of my favorite cities in the world, and the French countryside has yielded some of my favorite memories. I hope this situation gets better soon! Maybe it will be the catalyst for some reform.
John Mauldin, Editor
Outside the Box
Excerpted from Dennis:
The US dollar is strong despite the much weaker than expected non-farm payroll report released on Friday (although the revision of the previous month did do much to alleviate the concerns regarding October's modest growth in new non-farm jobs), and of course the political situation in France is perhaps the most important dollar bullish circumstance extant.
The suburbs of Paris are now suffering nearly two weeks of upheaval, and it appears…