We'll see -g- I really don't know how this mess will unwind,
and whether or not gold will be safe. Bonds should be
shorted, though. The reality behind USD decline is not the
trade deficit... and not the budget deficit... It's the
competition. The envy of the Europeans to the status of USD
as the world reserve currency. So, that's what Euro has
been after, IMHO. Europeans never ran budget or current
account surpluses - so, naturally, they also want to export
their inflation to Asia and other developing countries,
by exporting Euros as a reserve currency. They succeeded -
the Euro share of all credit market derivatives is almost
the same now as the dollar share. But it's not really a
better currency. It just has a large euro economy behind
it. So? Where do we go now?
I think the "event" is coming, and it does not really matter
what the Fed does. The bond market is very, very huge. Too
big to handle. Stocks & bonds will crash. Gold? I don't
know. Either it will trade at 200, on M3 contraction, as
more and more bad debt appears - or, it will trade well
above 1000, since both Euro and the dollar are actually
shares of that debt. Commodities will likely crash, since
debt going bad means deflation. We'll see if they can
prevent it? They could print, you know... |
