china is secretly bankrupt, page-29

yes the AUD is over valued by as much as 40%. We should be thinking about wealth protection in AUD , all the USD chatter you read here is inconsequential to an AUD investor...

50% of the debt in the world is owed in USD, in a debt deflationary collapse the major debt currency always rises as it comes into demand to service debt. If China is as bad as I suspect and completely collapses for a short time, in lock step with a Euro bust up the best trading position has got to be gold/silver (physical) and USD.

People go into a twirl about suggesting a USD strengthening because it challenges their foundation assumptions. Its not a long term position its a crash position to take and to trade out of when we get right into the heart of it. Crashes always take us into illogical territory, ANZ went from $34 to $12 in 2008, the trade then was to buy banks when the fiscal stimulus measures were announced right when ANZ was in the $12 region .

this time around though its much deeper and much more serious, IMO the the example above ANZ could go into the $7-8 range, our government because of the low debt can bail out our banks, so we face a low risk of losing deposits. What we should be looking to do is preserve our AUD wealth comparative to the rest of the world. A Europe then China then USA collapse would take us into unknown territory.

Gold physical in a crash of AUD and a rise in USD scenario is an excellent play. Even if the gold price went to $1000 the AUD gold price would be level if the AUD/USD is around say 65c is very good outcome. if gold held its position it would be an outstanding outcome in AUD terms.

Gold equities will fall in lock step with the rest of the market and at the bottom (or near it) disengage from the rest of the market and head up, the best trade in IMO is buying gold stock in the heart of the collapse, say TRY at 1.80 territory