There is a good article on Yahoo Finance by Robert Kiyosaki today. He points out that Warren Buffet is planning on reducing Berkshire Hathoway’s cash holdings by $30 billion dollars, investing much of that money overseas.

This is the real deal guys. All these questions about the US government deficit, monetary inflation, social security, oil, the war on terror — this ugly future is very real and it must be dealt with. Its not the end of the world, but people who have misallocated their assets will be wiped out much like what happened in the dot com boom. Unfortunately I think this realignment will be much worse and involve a very visible decline in the standard of living.

Kiyosaki points out that while financial planners are telling people to save more, Warren Buffet is doing the opposite. What does he know that the average American doesn’t?

The Telegraph reports - “Global markets are bracing for turmoil today after an ominous slide in the US dollar and a slump in equity and bond prices late last week sent tremors through the global financial system, evoking memories of the 1987 crash.”

The Brazilian Real, Mexican Peso, and South African Rand have all seen very steep declines.

Gold also saw a pullback in US Dollars from $710 Friday to the low $680s by noon Monday.

Long term, the US stock market and real estate markets have two very different paths which could be travelled down depending on the state of the money supply. One path is deflation, the other is inflation.

Here is the dilema — Japan’s housing market peaked around 1990 and has been riding straight down ever since. In that same time frame their money supply almost doubled!

Of course there is an explanation to this. The question is, will it really be safe to rely on inflation for long term investment appreciation?