Phil, two articles by Dr Doom, Marc Faber, which will stun you.
ameinfo.com
>>My point is this: In 2003 and 2004, all asset classes rose in value while the US dollar sold off. Would it be possible that in 2005, all asset classes perform poorly while the US dollar strengthens?
Only time will tell but for now, I would stay aside from equities, commodities (including gold and silver), and bonds and only hold the US dollar, which may have more of a rebound potential than is generally expected. As a trade, I would consider shorting the South African Rand or British Pound against the US dollar since the British price level is now so much higher than the one in the US.<<
ameinfo.com
>>Lately, it has become common wisdom that the incremental demand for commodities coming from China's industrialization will drive commodity prices higher in the longer term.
Again, I find myself leaning on the side of the consensus, which as a contrarian worries me and leads me to think about the possibilities of being wrong. Given my near term positive view of the US dollar, I am out of industrial commodities and focus this year on the accumulation of the grains such as wheat, soybeans and corn.
Lastly, I can't help but consider the likelihood that the world has entered an upturn in geopolitical tensions, which could be the prelude either to unpleasant civil disturbances or, in the worst case, to serious military confrontations and vicious acts of terror.
In addition to rising geopolitical tensions, I am also concerned that recent events surrounding the spread of the bird flu from human to human will, in time, lead to a pandemic of historic proportions.
Therefore, in view of all these uncertainties, the best option for investors might be to maintain low leverage, small positions and bet on some further recovery in the US dollar, which has completed a five wave decline.
Still, the US dollar has quickly rallied by more than 5% against the Euro, and, therefore, a correction should be expected in the near term, which would offer a better USD entry point. In fact, a retest of the US dollar lows and even a marginal new low would not surprise me and would not alter the view that the US dollar is about to enter a recovery phase, which could last longer than the consensus believes.
Since Asian currencies weakened against the Euro over the last two years, as they tracked the US dollar, a lower risk speculation, at least for now, might be to short the Swiss Franc against the Yen rather than to go long the US dollar. <<
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