Quote:
Originally Posted by The Demon
Cash is king? I would disagree with that statement. Precious metals like silver and gold are kings. Cash is getting less and less useful with the printing presses running. Purchasing power is decreasing and will continue to do so until the dollar is completely worthless. Thanks Barack!
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I know you and I disagree on this, but I stand behind the statement. I could qualify it and to say cash and cash equivalents, which could include metals which as you know I believe are in a long-term bull market.
The fact is, the US Dollar index is currently at the same basic level that is was in 2004. It also rallied hard during 2008 when the meltdown was in full force, and despite all the talk of inflation and dollar collapse, T-bonds are still strong and commodities in general are still weak. M3 and core inflation are not accelerating as would be expected in a run away inflation.
In 1999 and into 2002 I forecast (on another board) the demise of the dollar and that one should buy gold / silver. Now, while I still believe this is the general trend, the first part of this major move has been seen already. And, the economy is still trying to fend off deflationary forces -- with the Govt's full cooperation.
Nevertheless, I believe there is still a massive amount of credit contraction and bad debt (that will go bust) that will keep this force in play for 2-3 more years. However, following this I am quickly behind the (your) camp of further, more accelerating dollar weakness and corresponding commodity bull markets.
Our difference in opinion is a slight one. I see deflation as the near term, main risk before your scenario has a chance to be unleashed in full force. I could be wrong of course. However, you have to admit what the markets are saying which seems to match my analysis so far.
