"Wait till the wind of confiscation of gold or assets inflation hit the market. <G>"
Roosevelt got away with confiscation of gold*, because people were persuaded to believe it was evil. Today I don't think people are nearly as gullible, so I don't see that happening. In other words, most of us will "follow the yellow brick road" understanding the real meaning of the Wizard of Oz
As to asset inflation, that is likely to happen, IMO, but in a limited way, as I do not believe most traditional inflation hedges will participate this time around. Why? Inflation requires an increase in the velocity of money, and it has been slowing for years. That's likely to continue. So, and without and expansion in jobs and productivity, real estate will not be going up as in times past, nor will the art market, antique cars, or other such "collectibles" usually thought of as hedges.
JMO, however.
VP
* Roosevelt allowed producing gold miners to stay in operation, but non-producing gold mining claims were suspended indefinitely, and eventually canceled for not having been renewed decades later. It's interesting here to recall that when gold was confiscated the official price was 28 dollars an ounce. Once the government got the people's gold, they raised the official international price to 35 dollars, having thus just stolen billions of dollars from the public, and allowing huge profits for selected friends who were US-based gold producers. These two facts are the only reasons why gold and gold miners did so well during the Great Depression.
Revaluation of "official" gold holdings to market prices is also suggested as the way back to monetary stability, but if that happens, it will not come without a lot of pain first being suffered by most people now holding only fiat money, bonds, and most stocks. |
