by Vexed » Fri 20 Oct 2006, 19:24:23
$this->bbcode_second_pass_quote('', 'W')e've all heard that silver, gold etc will hit the roof when the economic **** hits the fan. What do you think will happen to other valuable collectibles like old stamps, paintings and antiques. Will an old Penny Black postage stamp have any intrinsic value after PO?
The answer to this question really depends on what your vision is of the future.
From an American POV, I believe the dollar is in for a jolt. Simply put, economically, we are stuck between a rock and a hard place. We either keep interest rates low and screw our overseas investors (who consequently invest their money elsewhere) OR we continue to raise interest rates to fight inflation and screw our own debt ridden SUV-driving McMansion-owning populace.
I believe that interest rates will continue to rise, but fail to control runaway inflation, so I ask myself: If the US has an inflationary recession, would I rather own “dollars” or “tangible investments?”
I think
that is the real question.
$this->bbcode_second_pass_quote('', 'A')in't nobody spending 500 bucks on a beany baby when people are standing in bread lines.
500 US dollars might one day seem like very little to an overseas buyer who has seen their currency retain strength as America is overrun with debt. And unless the Doomer PO scenario occurs and we all eat each other, it’s much more likely that the world, as always, will have pockets of economic strength and pockets of economic weakness.
As the buying power of the US dollar has declined since 2000, the power of the Euro, Loony, etc. has increased. Consequently, multinational businesses have seen an increase in their foreign profits. That may well be why the Dow is flirting with new highs. Perhaps it has nothing at all to do with the
strength of the US economy, and more to do with global nature of those 30 companies.
I know I have benefited from owning investment quality goods instead of dollars over the last 5 years. In some currencies, I have watched my dollar decline in value by upwards of 30%. None of my tangible investments took a hit like that in the same period.