Generally, I disagree; given all the printing by the Fed, CRB,
oil, gold, stocks, and interest rates will likely zoom again,
while the dollar will likely drop back to 80. If the dollar
drops below 80, and an uncontrollable rise in rates and the
dollar fall starts,
then we'll see a crisis. I don't know what gold will do
initially - it could drop as low as 425, but eventually it
will rise to at least be equal to the DOW (10000), unless
we enter hyperinflation. Then the number of zeroes behind the
price of gold, and DOW, will be a wild guess. 15? 22? 41?
I agree with Russ's Brazilification thesis. So, I believe
America eventually will go the path of Brazil, Zimbabwe,
Ukrane, Hungary, Germany, and other Banana Republics that
existed throughout history. I see way too many analogies
in what's happening today in the US with what happened in
these countries. The only difference is that US is the issuer
of international currency. However, if the confidence in
that currency faulters, the result of the selling will be
much worse than in the above mentioned countries, not better,
simply because other countries hold too many dollars as
reserves!
While India could be friendly, China, Russia, and the Middle
East are not exactly politically friendly to the US. |
