"What has really happened is there is a flight into the US Dollar. Now, the US dollar is not a safe haven. I assure you, the US Dollar has got terrible problems and it is a very flawed currency, but in the panic, people are rushing into Dollars because they do not know what else to do. That is going to continue to make other currencies weak at least for a while and as long as people stay terrified, they are going to run into places like Swiss Franc or the Yen or the US Dollar." ~ Jim Rogers
Wednesday, October 5, 2011
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http://www.themoneyillusion.com/?p=11252
ReplyDeletehttp://pragcap.com/dear-jean-claude
ReplyDeletehttp://video.ft.com/v/1198065093001/Bond-fund-star-focuses-on-deflation
ReplyDeletehttp://video.ft.com/v/1198065093001/Bond-fund-star-focuses-on-deflation
ReplyDeleteThank you for such wonderful selection of "deflation risks". I must admit Jeffrey Gundlach is amazingly good at what he does and I agree with him on how he actually trades between sentiment of inflation / deflation trade. And just like Gundlach himself admits, we are slowly but surely edging ourselves towards a period where we will have large scale money printing, as opposed to only QE's.
ReplyDeleteTherefore, instead of buying Treasury Bonds, which have been in a bull market for 30 years and to me present no value other than just a trade, I rather protect myself with real assets - commodities. Throughout history, every time governments printed money - and we might need a more serious crisis for them to do so - the only thing that worked was owning assets which will adjust to this type of currency devaluation.
I wish you good luck with your US Dollar / Treasuries strategy, but I rather stick with Agriculture and Precious Metals.
I also wanted to add that I am not surprised that Treasuries rallied. I actually picked the bottom in the 30 Yr Bond back in February, because everyone was so negative and the inflation trade was consensus (link here).
ReplyDeleteWhat I was surprised at is the intensity of the Treasury Bond rally. I closed my longs too early indeed, but it was only a trade. Like I said in my opinion Treasury's do not offer value after a 30 year bull market, other than just for a trade. I very much misjudged the level it would reach, equalling 2008 highs. Nevertheless, I see this as a positive development, because I have no been given a second chance to short this bubble at very great entry point.