Cheney Betting Against The Dollar
Not exactly fresh news, but its been reported that Dick Cheney, our beloved vice-president is betting against the US Dollar. He has tens of millions of dollars in foreign government bond and currency funds and international and emerging market stocks. His excuse is that it’s in a blind fund and he doesn’t know what his advisers invest in. That sounds like complete rubbish to me. I can’t imagine someone as intelligent as Dick Cheney not knowing what a huge chunk of his reported $95 million networth is invested in.
I’ve believed for sometime now that the government actually wants a weaker dollar and have been investing accordingly, but having the vice-president profit from it is a bit too unethical. The fact that he’s been profiting from the war in Iraq through no-bid contracts to Halliburton (in which he still retains a large amount of shares) is bad enough. If this had been China, he’d have been executed for bringing dishonor to his country!
Ethics aside, at least he’s good at investing. By being bearish on the dollar and the US economy he joins the ranks of supermodels, billionaire investors and sovereign wealth funds!
But there’s significant conflict of interest. Rather than spending $2 Billion a week in Iraq, if the government was spending that money on infrastructure development we might have a better economy. A stronger economy wouldn’t need this rate cuts and government deficits wouldn’t be in the trillions of dollars. This might have conceivably led to a stronger dollar.
Instead we have a dollar that is the weakest its ever been. For the first time in history, the Swiss frank is stronger than the US dollar. Most foreign currencies have appreciated considerably against the dollar over the past 2 years and I don’t see any signs of this trend reversing.
So are you going to follow the leader and bail on US investments too? Or are you going to stick your guns and weather the storm?
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April 1st, 2008 at 1:50 am
I don’t think it’s unethical for the Vice President to invest in foreign currency. Warren Buffett is betting against the dollar because it’s a smart position to take. Certainly our deficit spending fueled in part by the war has contributed to the trade deficit. The weaker dollar will help to bring the trade deficit down. But the sure fire way to balance the trade deficit is for Americans to stop spending so much. Unlikely.
April 1st, 2008 at 7:31 am
Did you not get the memo on the stimulus package and mortgage bailout? j/k
This is not the first time Cheney has invested around his job. This does look bad though.
April 1st, 2008 at 7:45 am
Dough Roller,
The difference is that Warren Buffett doesn’t set our foreign policy or declare war on other countries. Dick Cheney does and that’s what makes it unethical.
April 1st, 2008 at 9:57 am
The most surprising thing to me is that anyone is actually surprised about Dick Cheney doing something unethical. This is a guy who lied us into a war against a nation that was actually a buffer against Al-Queda leading to 4000 American dead, 25000 American casulaties, who outed a CIA agent for political gain, who claimed we would be “greeted as liberators” and who has profited personally greatly from the war. What’s the surprise unless someone’s just not paying attention?
April 1st, 2008 at 5:21 pm
If financial ethics and politics an issue, then we forget our first couple of Presidents made their fortune off slavery or free labor.
I have to admit though, I look at the Euro and Europe and compare that to the Dollar and America and wonder if there is something right with either picture. Certainly it is apples and oranges, but the overall picture tells me there’s more to it.
There’s one thing to keep in mind when it comes to investing, you can make money either way, whether the market goes up or down. So the question is, is it still ethical to profit from the losers as it is from the winners?
April 3rd, 2008 at 9:36 pm
Great Posting. I’ve often though there should be a requirement that high ranking public officials convert all their assets into t-bills for their time in office.
April 3rd, 2008 at 10:36 pm
another advantage of having all your assets in T-bills is that you can’t spend $80,000 on hookers!!!
April 14th, 2008 at 9:03 pm
[…] Income Investor presents Cheney Betting Against The Dollar posted at LIVING OFF DIVIDENDS & PASSIVE […]
April 16th, 2008 at 8:42 am
“As Barack Obama found out last week, when you run for president you can’t even get away with being a lousy giver to charity. After Mr. and Mrs. Obama released their tax returns, the press quickly noticed that, between 2000 and 2004, they gave less than one percent of their income to charity, far lower than the national average. Their giving rose to a laudable five percent in 2005 and six percent in 2006, with the explosion of their annual income to near $1 million, and the advent of Mr. Obama’s national political aspirations (representing a rare case in which political ambition apparently led to social benefit).
According to an Obama spokesman, the couple’s miserly charity until 2005 “was as generous as they could be at the time,” given their personal expenses. In other words, despite an annual average income over the period of about $244,000, they simply could not afford to give anything meaningful….
The Obamas got rich in 2005. Their income increased sevenfold from 2004 to 2005, mostly because of Mr. Obama’s book royalties, and stayed very high in 2006 for the same reason. In 2006, another wealthy political couple with significant book royalties was Mr. and Mrs. Cheney, who had a combined income of $8.8 million, largely due to Mrs. Cheney’s books and the couple’s investment income. Just how much did the Cheneys give to charity from their bonanza? A MEASLEY 78 PERCENT of their income, or $6.9 million. (No, that is not a misprint.)” MORE