Are Safe Haven Investments Really Immune From Current Crisis?
16/10/2008 § Leave a comment
Now, back to the U.S. dollar. We are creating trillions of dollars out of vacuum and throwing them into a black hole. Make no mistake; it is inherently hyper-inflational. The whole planet is facing a big dilemma today. Short term it is about liquidity preservation or die. A little bit longer term it is about valuation preservation or die. Hoarding fiat currency while new money is created out of thin air preserves liquidity but loses value. Hoarding physical assets preserves value but reduces your liquidity.
I think we will see a very sudden and abrupt switch from a false U.S. dollar rally caused by every one hoarding the cash, to a hyperinflation scenario where every one wants to spend out the cash as fast as possible. In physics, it’s like a high pressure and high temperature phase transition. The credit will go straight from solid ice to rapidly expanding vapor, skipping the liquid phase altogether, blowing everything out. The phase change will come imminently and suddenly, so be prepared for it!
GET OUT WHILE YOU STILL CAN!!