koan, thanks for that link to the John Taylor interview. He makes 2 points:
(1) If a big bank (incl AIG) is nationalized, all its CDS etc derivatives will fall due immediately (since this is written in their contracts) which would bring the world's banking system to a standstill and would make the US$ shoot straight up, 15% - 20%.
(2) When things begin to improve a little (John Taylor expects this by July, August 2009; also says things will keep improving for 6 months before most people will even *see* any improvement), the US$ will begin to fall. (I believe he means that "things improving" will take place when the stimulus slush monies finally push banks into providing liquidity.) Some time later, the US$ will really fall...
With the US$ beginning to fall, commodities will rise. The currencies of commodity-strong countries like Australia and Canada will rise first, and then later the Euro, too.
The yen (shrinking work force etc etc) will tank and keep tanking. Will make people in Canada and US mad.
And: his institutional clients are asking for gold products more and more; John Taylor says gold will go a "great deal" higher but he sees it going to lower $800s first.
"there is all this money slopping around now, and that's why I like the commodity countries, and gold."
When asked "what limit for gold", he says "well, no limit". If we apply the leap from $35 to $800 in the 80's and use that scale for the rise from $300 ten years ago, then we get $6,000..." |
