I think that the potential for a devaluation of the USD is immense. Bernanke has said as much. I think that's why the world is rapidly racing away from the US-Petrodollar as the reserve. All this delaying the inevitable is precisely because it IS inevitable and the powers know that the USD is part of history and are simply trying to reduce the damage. A soft landing is possible - for the world - not for the poor citizens paying for their leaders behaviours. The UK devalued its pound as part of the windup of the (physical) UK empire and managed to continue playing a part in world affairs - to the chagrin of many. It would be possible for the US to devalue, remain the biggest bully boy in the room and use its ongoing military might to shore up against enemies "foreign and domestic".
Alan Greenspan tells congress that america can honour its debt obligations but not the purchasing power of the dollar.
Which is just NewSpeak for defaulting on its debts. China has known this since 2008 and has been making other arrangements. Many other countries are coming to the party as well - mainly the rest of the BRICS and a statement like that can't be much clearer. "We'll pay you the number of dollars, but those dollars will be worth two thirds less. The sort of tactic you can do only once, and only if you have the largest military machine the world has seen.
So in the terms of Mike Maloney's perspective, I've been trying to come to grips with exit plans for a while now. I've no heirs and if I time it right I'll spend everything before I die. The unknown is when you die of course, but giving an educated guess, my exit plan in the current state of the world, is to retain a core holding, sell the rest into whatever market there is (whether new currency, or bull market) and yes, jump to real estate. Read the forum for perspectives on why RE will go the opposite direction of metals. The core holding is my safety margin in case pensions and social services are impossible. Entirely possible, but Australia IS different, in that we're more part of Asia than US/UK and we could bounce back in some way. Whether social services exist at the current levels is another question. Hence the core holding nest egg.
If we are hit with 2-3 years of deflation, all the better since it will enable me, and lots of other people, to prepare for the worst - being the biggest dose of stagflation we've ever seen. I've said here many times that the seventies and eighties are the clue to our next 10 years IF they manage to unwind the mess in the process. If not, then I'm off to a cave with tins of beans around 2020.
There is also a fairly good argument for getting a loan for real estate, allowing inflation to reduce the loan in real terms, and using the gold bull to clear the balance, using the see saw of property prices, metal prices, aus dollar and fear. I mention 'fear' because it seems to me that Australians are very prone to herd behaviour (when 'she'll be right mate' means no worries, but when the newspapers say 'crash' everyone sips their lattes and decide to batten down the hatches).
In the seventies I was one of the people who headed to the bush to escape the imminent collapse of civilisation. As you have probably noticed, it didn't happen. Same thing this time, the worst won't happen, but something else might. So I'm trying to use the lessons I learned then this time around. And the lessons then were metals bull, massive inflation, lots of unemployment, real assets holding wealth and political repression. If I was in the USA I'd leave. If in the UK I'd try and get into Australia and if in Europe I'd try and move to the wealthy bit.
If I was young and had family plans, I'd be doing what Faber and Rogers have done and be getting myself located in Asia. See sovereignman.com for lots of reasons.
All that said, I truly hope that the world pulls itself out of this because I've seen the small version in the seventies and it wasn't pretty. This time is a lot worse and a lot of people could lose everything and not know what happened. Then it would get very ugly.
There's an old saying 'Trust in God and keep your powder dry'. Metals is keeping your powder dry. Trading it for real assets is trusting God.
p.s.
http://therealasset.co.uk/gold-investment-quintet/
These are the people who know the most about the metals markets imho.
would you care to expand on what actually happened to the ordinary people, their response and how in hindsight they could have buffered themselves better?
