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XMFSinchiruna (27.86)

Sometimes only a picture will do... :) Note the expectations for gold as the dollar continues to slide

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23

August 02, 2008 – Comments (4)

 

A larger version of this image is posted in the comments below.

The FNM and FRE fiasco represents the final nail in the coffin to send the USD into virtual free-fall. This is all so unfortunate, but nonetheless the future path of the USD has been written in stone by these and similar actions. The fire-sale of derivatives by MER las week, too, signals that a systemic deleveraging of trillions of USD in assets is on the horizon.

Time to be very defensive, Fools... it's going to get tough from here. Maybe this is a good time to direct readers back to my December blog post.

Good luck to all!

 

4 Comments – Post Your Own

#1) On August 02, 2008 at 11:15 AM, XMFSinchiruna (27.86) wrote:

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#2) On August 02, 2008 at 1:13 PM, kdakota630 (29.68) wrote:

I know that you're very bullish on metals, particularly precious ones (ie. gold), but I'm curious how much better you think they will perform compared to base metal stocks.

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#3) On August 02, 2008 at 1:14 PM, kdakota630 (29.68) wrote:

...or coal, which I also know you're very big on.

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#4) On August 02, 2008 at 4:55 PM, goldminingXpert (29.53) wrote:

worldwide recession coming up will pound the base metals. Gold trades more independently of supply/demand... so the outlook for gold is probably better, though the whole debate really comes down to inflation vs. deflation. If you are in the deflation camp (as I am) you don't want to have a large position in any metal at the moment. Of course, the best places to hang out are where supply/demand helps you, particularly oil (peak oil), nat gas (there's only so much in Canada and LNG terminals are not getting built in the US at sufficient speed), and silver (as there is very little above ground silver in the world ~1/8th of above ground gold, and silver does not get recycled to nearly the same extent as gold.

However, shorting retail in particular and American stocks in general is a much safer bet than metals now. However, for a diversified portfolio, you want to own JAG (especially after the senseless beating it took on Friday) and BWP (the natural gas pipeline). 

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