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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Square_Dealings who wrote (62145)5/29/2006 7:23:30 AM
From: Mike Johnston   of 110194
 
Only those that buy gold for dollars in foreign currency denominated accounts will clean up.

If you buy gold in a dollar denominated account you will do only slightly better than protecting your wealth unless you use leverage, since with oil at 200 and gold at 2500, cost of living will at least triple and euro will buy 2.5 dollars.

And what if the authorities decide to confiscate gold profits, for example instituting a new, emergency 50% or more gold profit taxes ?

In a euro denominated account for example, dollar profits from the rise in gold will accumulate in the account, but the value of the account will be protected against hyperinflation and dollar devaluation if the profits will regularly be exchanged into euros.

The risk is, of course, if europeans engage in the same kind of destructive, inflationary policies that would cause their currency to collapse as well.
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