Do you not worry about the following:
- the US interest rates are at an all time low;
- other key countries' interest rates are also at record lows, except for a few exceptions like Australia;
- the USD exchange rate is also significantly down vs key commodity and EM currencies;
- everyone is taking for granted that BRIC countries will continue their buildout of infrastructure and property, etc so this demand for key commodities will continue for the next 10-20 years.
Yet, it seems as though the US is about to attempt a serious economic recovery, and what if, at that point:
- US interest rates rise significantly;
- USD turns up sharply;
- other countries follow suit with interest rate rises to cope with the above, esp since inflation has been rearing its ugly head in several countries, esp. BRIC ones. At this point, there could be a marked slowdown in key countries, esp. China, India, Brazil, etc.
In sum, what is your fallback strategy if there is a significant reversal in prices of key commodities, esp gold, silver, copper, etc lasting say, a year.
Many thanks for your thoughts, as always |
