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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: stan_hughes who wrote (196)	6/18/2007 6:00:36 AM
From: Real Man	Respond to of 71475

It depends on how bad things get taipeitimes.com While I don't really think things can get here as bad as in, say, Zimbabwe, clearly, a rapid debasement of the dollar through inflation to avoid post-bubble fallouts and/or financial/derivatives collapse is the kind of choice the government and the Fed are making now. The rest of the World follows, since US is the only powerful consumption engine in the World. If US consumer starts paying his debt, the World is screwed. If history is a guide, then the last time a first-World country had hyperinflation was 1920-s in Germany and Italy. Now, Yugoslavia was a prosperous country 20 years ago, before hyperinflation debased its currency to zero. The question is sentiment. Once the World turns its back on the dollar, the US will likely fall into a hyperinflationary spiral, since all production facilities have been exported from the US to "cheap labor" countries. That's my biggest fear. Asia will have a major case of deflation.

To: stan_hughes who wrote (196)	6/18/2007 6:23:53 AM
From: Real Man	Read Replies (1) \| Respond to of 71475

I agree with you in general - gold may fall for an extended period of time, say, 1-2 years. However, the secular bull market in gold is definitely not dead, so any such fall should be regarded as an investment/buying opportunity. Other major currencies, such as Euro or Yen, will definitely be debased. I would think of gold/silver as a main protection against a dollar crisis - park your money there, forget about fluctuations on the daily, and even monthly basis, and you're safe. Wake up and sell when there are lines in NY and Toronto to buy gold, and DOW/gold ratio is about 1. All the debt out there will be paid through currency debasement, since the other alternative (the great depression) is politically unacceptable. Gold has to be mined, it can't be printed. PMs is the only asset class that's good as an investment at present time. Rest assured, if you get carry trade blow-up, gold will likely explode to the upside, since lease rates on gold are extremely low. stockcharts.com