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Noah and the Ark
People were so panicked, they recently resigned to Uncle Sam their money for a negative nominal return on 90 day Treasury Bills as the dollar retraced its rally from 70.70 to 88.46.
As of 15 December 2008 the target turned bearish after being bullish. The target for the dollar is currently 67.
http://stockcharts.com/charts/gallery.html?%24usd
What if Uncle extends Treasury maturities indefinitely?
In 2008 physical gold and silver sold up to 100% premiums over paper spot and backward future prices (higher now than later, like oil), with record COMEX gold and silver delivery requests facing the futures market. Gold and Silver Eagles deliveries have been delayed and mints have been backed up.
While some have called for widespread physical NYMEX COMEX deliveries to correct the disparities between the physical and paper markets, they forget that future derivative margins may be increased and deliveries paid in cash, another force majeure.
http://www.nymex.com/media/delivery.pdf
Better to own select gold and silver stocks, which were legal and safe when physical gold ownership was not, and enjoyed leveraged returns. Dome and Homestake Mining outperformed most other investments 780% or more during the Great Depression, with dividends and price appreciation.
http://www.forbes.com/global/2003/0609/041_2.html
Leverage is a two-edged sword
Debts affect all of us.
Do we really want to borrow or leverage when more and more people with real declining wages, losing benefits, part-time or out of work, cannot make payments on declining assets?
Senior people a year from retirement benefits at Maytag Whirlpool were fired or told to go work in Mexico at two dollars an hour.
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