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All right. So we keep hearing that America's image is in the dumps overseas, then why, why, why, why are so many foreigners investing so much money in America? Investment in this country hit a record in September. The latest month from which will tell us, nearly 102 billion dollars. Foreigners (are) clamoring to get their hands on anything made in the USA. So why the big attraction when everyone with tollwas avoiding this country like the plague? Let us ask our gang from Cavuto on Business, ENTrust Capital founder Gregg Hymowitz, who shows up on the show whenever you feel like, by the way lately is rarely. Leigh Gallagher is the senior editor of Smart Money magazine. Mike Norman, the founder of Economic Contrarian Update. Mike, what's going on? I thought everyone's gonna avoid us like the plague.
... If he doesn't want it, Well, you know, look, two reasons, Neil, number one, US interest rates now are very, very attractive to foreigners, that's one of the main reasons, I mean dollar assets right now, the return on dollar-denominated investments is very attractive, compared to many other places in the world. The other thing is this, Neil, and it's something that, Fed Chairman Nominee Bernank touched on the other day is that these Asian countries with all their huge savings, they still employ this, a business model of exports and in order to do that. . .
And with the place to send it, do you buy that with the place?
I do buy that, but there is another thing that's going on here. This time around, the majority of the investment was in corporate bonds and stocks as opposed to treasuries. So, you know, foreigners want, they wanna google, they see these stocks going 400 dollars and, you know, they are hoping for, you know, returns like that.
Great for the besured life?
Do I, do I go last coz I put the plane hard to get? Is that, when I'm going last.(Before we're going into it, you have a very.....) Look, I, I, I, I think, I think Mike is right. I think it's very much driven by interest rates. I think, you know, the higher the rates go the more attractive, some of 15 * masses are here, and the other thing, and..
But will that benefit our treasuries? They are not benefiting.
Well, but you don't know where the yields would be if you don't have(Ok.) foreign money coming in to support our deficits. Our tremendous deficits. . .
But do you think it insure life?
But, no but also I was gonna say to least point, you know about the stock market. You know, also don't think just because of today's economy that's why the dollars are coming here, right? I mean very often, it's what the investors think is going to happen out 12, 18 months. So there may be the view that world economy here isn't doing gangbusters yet, maybe the future (over there). . .
(Do you buy that? Mike)
Yeah, I do buy that. And, you know, getting back to the point that was making me forward was that, you know, in order for these countries to continue subsidizing their export industries, it necessitates that they have to buy dollars to keep their currencies low. So that's why we shouldn't get all crazy when the dollar goes through this period of downward dip because eventually (So we get crazy now when we are all feeling happy. You know, money is coming here, to count. . . ) Maybe, maybe. Maybe it s a peak now.
Is it a peak now?
No.
It could be. , I mean, it's certainly a question, I mean the other thing to think about is where else are these countries gonna put this money, lots of these coming from the Middle East. Or they can't put it in other oil-rich countries . That is too risky. So, you know, we are stable.
Put it in here. All right, then put it into Gregg , Hedge funds and all that. All right. . .
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