gold red. whats the target if this blows over
- Thread starter stock777
- Start date
That's a very interesting thought. We are experiencing massive price reductions in commodities which are priced in USD. If the exchange rates stayed like they were at the height of the massive commodity bubble, hard assets like crude would be cheaper than dirt right now for the Europeans for example. They are already cheap for the US, but there would be massive shortages of hard assets in Europe if the exchange rate stayed the same. That is why the USD is strengthening, despite all this disaster in the US. This compounded with the uncertainty of the eurozone's economic problems, is killing the euro.
A few questions to ask: What happens if we come out of this mess? Does the until now weak dollar devalue even further? Will we have entrenched inflation from all the govt intervention? Do world currencies devalue heavily on a relative basis causing gold to outperform? Will commodities start to run like they did before? Would another run up of commodity prices drive us into another recession?