<My point is that for the economy as a whole, falling dollar will pressure prices upward in unprecidented ways due to the massive amounts of raw materials, goods, and even some services, which the US economy isn't even involved any more.... NO? I mean, you can't compare this to any other time in history can you?>
You're right, this hasn't happened to the US, but the UK went through something similar.
So workers accept wage concessions to keep their jobs-look at the auto industry and airlines. *Eventually* manufacturers become competitive and products will be sourced domestically because
'imports are expensive'. It has been a long time since we heard that, but we'll hear it again.
Inflation will affect imports more than domestically-produced products *eventually*. A few tarriffs and protectionist measures and this happens even sooner, though.
So, I still think other nations have to devalue (positive for gold) and this, I believe, draws into question Precter's currency play (aside from being an easy trade). Is it as simple as short the dollar long everything else (DDGUEEU) or do we get GUEED? Will other nations be able to avoid devaluation? If so, one should be overweight commodities, energy longer as a bet on global economy. One could also play currencies.
If NOT, gold ( and gold shares after a dip) are the play.
So, are PMs (physical/shares) the ultimate safe haven or are we missing some market (s) that will survive (SA?). |
