The topic of this huge stimulus (if you can call pork stimulating then I guess) many sides are being drawn in the sand. Either this will work and has inflation like the 1970's or it will not work and we just added debt to our great gandchildren to pay back. Either way the argument for fiat currencies to collapse looks in the books.
Some comments from others say "well if the entire world is in the same boat, then the Dollar will keep its value relative to the other currencies. To this I have to agree. But because the dollar stays par to a collapsing Euro or pound, does not mean it is keeping par to tangibles. Gold, Oil, Grains etc.
So the question that needs to be addressed here is. Are we inflationary or deflationary? If you have no idea or do not want to guess until proven, then stay in short term treasuries. If you feel this will be inflationary, go long tangibles. If you feel we are deflationary, short things.
While it is my belief (and it can change over night) that we are in deflationasry times, the rush to gold as a hedge (fear here) should keep the prices where they are. Record bullion sales and record ETF hording have me convinced most do not trust what is coming out of politicians mouths. So the hedge is on.
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2 comments:
a different perspective on commodities:
Falling Milk Prices Kill Cows
2/12/2009
The price of milk at wholesale fell significantly in January, leading some dairy farmers to make tough cost-cutting decisions -- like thinning the herds
http://www.marketwatch.com/video/asset/falling-milk-prices-kill-cows/6C059D32-E6F0-4A62-9924-B2E006F0DE2E?dist=hplatest
from marketwatch.com
Agreed that we are in deflationary times.
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