This November 23, 2004 Gary Scott message looks at how run away U.S. debt and trade deficits have led to a US dollar crash.
Since no solution to these international investment imbalances are in sight we are likely to see dramatically increased inflation….unless U.S. productivity dramatically improves from some new technology, or unless the increased birth rate in the U.S. bails the problem out.
The question is how the forces of financial imprudence, improved productivity and demographics balance out. More important is the question of how we should react in each scenario.
Reader Craig McCarty sent me an interesting idea on how to answer this question when he wrote.
Congratulations on another excellent article.
Suggestion: It might be interesting to get your and the reader input on what were good/bad investments in very difficult times, e.g. the great depression, the hyperinflation of Latin America/Weimar Republic, etc. For example, oil, gas, entertainment, etc. did very well during the depression.
Then fast forward to future and lead a forum on what should do well/poorly under different economic scenarios.
I think such a dialogue would be very instructive to your readers and a number of very surprising ideas might come out of it. Regards, Craig”
This is a good idea so tomorrow we'll look at how investments fare in a variety of economic scenarios. I would like your input on good or bad investments in very difficult times, e.g. the great depression, the hyperinflation of Latin America/Weimar Republic, etc. to help me answer these questions.
Until tomorrow, good investing!