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Strategies & Market Trends : Waiting for the big Kahuna

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To: William H Huebl who wrote (68715)	2/19/2004 11:19:37 AM
From: Real Man	Read Replies (1) of 94695

Sure. The trick is, with US of A plunging, the rest of the World will be in deflation. So, commodities will move up in dollars, but not in other currencies (should a crisis happen). Gold is a totally different animal - in times of crisis it becomes a currency, and a debt-free currency. It costs real money to mine it, and there is a finite supply above ground. When Argentina fails, gold goes up in Pesos, but down in other currencies, since Argentina failure is deflationary. While some people may hold Argentinian USD-denominated bonds, nobody in the World holds Pesos. When US fails, so will the World currency - the USD. The world will need a replacement for it, and I don't think the Euro or Yen will do - distrust will spread to all currencies. What's left? Gold.

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