I’ve written previously on the risk of serious currency chaos coming our way in 2010.
My view on things:
1. I agree with Jim Roger’s that the USD will go the Pound Sterling’s way. Crazy inflation is coming and the gigantic debts which the US government will have to sell; I rather short bonds than stocks.
2. The Brazilian Real will be a safe haven towards the USD, yet the Brazilians will try to do everyting to prevent their currency from a crazy appreciation against the USD, and they are right to do so.
3. Rather buy agriculture instead of gold or silver to protect yourselve against inflation. “You need to put your money in countries that produce natural resources. Many of those natural resource economies will boom; Brazil is going to be a better place to be then Belgium. I am wildly bullish on commodities.”
4. The South African Rand will crash, heavily. Zuma promises 4 million new jobs by 2014, which immediately puts pressure on the Rand. Zuma even promises 500.000 new jobs by the end of 2009; all South African sources agree this is wildly unrealistic. As to the World Cup in 2010: “The government appears to hope that the 2010 World Cup soccer tournament will generate a demand for goods and services justifying public investment. Here again, the track record is murky. Historically cities hosting the Olympic Games have experienced inflated housing prices, a loss of jobs and high debt levels”.
Tags: currency crisis
