Clarity=Confidence

A lot has been made of Warren Buffett's comments a couple days ago about "the economy going off a cliff". I saw some of the 2 hour long interview and he was actually quite upbeat. He did say that clarity (by the political forces primarily) will transform into confidence. Declining confidence is more of a symptom of what is wrong vs. the cause of our travails. Confidence is derived from improvements (forward looking) in what we see as economic activity. 

Buffett also said that he is convinced that over the next 10 years owning a basket of American companies (equities) will do considerably better than fixed income. Further, he pointed out that U.S. Treasury  securities are guaranteed ...to lose purchasing power over time. Indeed. He went on to describe the late 19th century and early 20th century economic struggles and said we have always come out of these troubles and will again this time. Final tidbit ...he mentioned that the Dow Jones Industrial Average went from about 66 to 11,000 during the 20th century. Keep the faith and stay tuned.