Wednesday, April 01, 2009

Gold treads water on fears of stronger dollar

What's going on, you may be asking? Why do I keep reading newspaper stories, like this one, telling me that the dollar is getting stronger and that gold is getting weaker?

Is the entire world investment Wildebeest herd sweeping from one fearful terror to another, on a whim and a prayer? Does anybody really know what's happening?

Do the Austrians know?

Chief amongst these Austrian predictors is Peter Schiff. He forecasts that the Dollar is going to collapse against gold, along with all other world paper currencies (though the Dollar will be worst hit.)

So what do you do? Do you follow the herd as it sweeps into the (temporarily?) stronger Dollar, or do you go with a priori Austrian theorizing?

The choice, alas, is yours. Obviously, we'll all find out for sure in, say, five years. But by then it will be too late if you took the wrong road. Or you could get rich if you choose the right road?

So who do we blame for this constant uncertainty, where we can never plan safely for a prosperous future? Just ask any politician or central banker of your choice.

We allegedly pay them lavishly for the privilege of their wise rule which is supposed to smooth out all of life's troubles, yet all they seem to visit upon us is one volatile problem after another.


1 comment:

not an economist said...

When answering that question for themselves people need to ask what the best way is to defend themselves against price inflation over the next few years. If that is the question put then I fail to see why sbdy would weant to hold their savings/investment in sterling - they'll just evaporate.

As for the dollar - well Bernie-the-bank man is going crazy with the printing press aswell. Other govts are clearly speaking out against the dollar as a reserve currency because of their fear that it will collapse. Maybe some investors feel the plans that Geithner annouced the other week will ensure prosperity and there is clear evidence that another bubble may be coming our way (due to all the monetary expansion of late). But thats short term. In my view. Long term there will be another downturn and another crisis.

Then again as I said in the post about joing the Euro & Peter Schiff I am a knob cos I fell for the Euro April fool joke on Capitalists at Work. So best not to take my advice ...