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Markets go down, then dollar goes down, Markets go up, dollar stays down. Pretty simple!
http://www.kitco.com/ind/Lee/jun042009.html
"Debt-based monetary systems are inherently unstable. Money is created out of thin air by the banks and lent to government, consumers and businesses. In order to service and replay those debts, the borrowers take on more debts. Asset prices are inflated, and the vicious cycle continues until the debtors are unable to borrow or the banks are unwilling to lend. At that point the system snaps, everything is sold off, and we have a financial crisis at hand. In this paper we examine what happens to equity and currency markets in the aftermath of financial crisis."
http://www.kitco.com/ind/Lee/jun042009.html
"Debt-based monetary systems are inherently unstable. Money is created out of thin air by the banks and lent to government, consumers and businesses. In order to service and replay those debts, the borrowers take on more debts. Asset prices are inflated, and the vicious cycle continues until the debtors are unable to borrow or the banks are unwilling to lend. At that point the system snaps, everything is sold off, and we have a financial crisis at hand. In this paper we examine what happens to equity and currency markets in the aftermath of financial crisis."
"Gold is the ultimate antithesis to the dollar. Gold is liquid, universally recognized, limited in quantity. Just like Russians and Argentines trying to anchor their currencies to the dollar, the US government devised various ways to slow down the rise of gold prices to maintain dollar’s soundness. However the massive money printing by the Fed and fast-eroding confidence in the dollar by international investors might just be the key to drive gold past the all illusive $1,000/oz level and not look back.
As we saw in the past crisis in Russia, Argentina, Thailand, and Brazil; equity markets eventually do return while the devalued currency never regained strength. The US case is no different. Further rebound by the equity market in nominal terms can be seen albeit with extreme volatility, and we will likely witness a 4-digit gold price in 2009 that will never look back. As the Chinese saying, crisis is spelled danger + opportunity. There is still time to diversify out of dollars before the world recognizes the dollar’s permanent debasement and demotion of status. Visit goldmau.com and sign up for our free market and stock updates.
John Lee,"
As we saw in the past crisis in Russia, Argentina, Thailand, and Brazil; equity markets eventually do return while the devalued currency never regained strength. The US case is no different. Further rebound by the equity market in nominal terms can be seen albeit with extreme volatility, and we will likely witness a 4-digit gold price in 2009 that will never look back. As the Chinese saying, crisis is spelled danger + opportunity. There is still time to diversify out of dollars before the world recognizes the dollar’s permanent debasement and demotion of status. Visit goldmau.com and sign up for our free market and stock updates.
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