Hi All,Was anyone expecting a big market correction between the...

Hi All,

Was anyone expecting a big market correction between the March 2009 bottom and end of 2009. I hope I was not the only one. But the major correction did not come although there were hiccups on the way. It now looks like it is going to go higher even more.

I've read a few articles in mainstream media about reasons why some may expect a larger correction, eg:
- effects of the credit derivatives losses have not been fully realised.
- the US is in too much debt.
- personal credit levels are too high
- stimulus encouraging spending but not productivity,

Anyway, I did a bit more research on the extreme scenario where the US can't pay its debt or it printed so much money to pay its debt which lead to hyperinflation like recent Zimbabwe or Germany in the 1920s. If you follow the Australian news, remember Barnaby Joyce, out of nowhere, warned about preparing in case of US collapse? I don't think he came up with that idea himself - must have had some serious advice.

From my brief research I found some interesting stuff:

- The Federal Reserve, which can print US money (which it needs to in order to pay debt), is neither Federal nor Reserve. It is owned by a group of Banks, not the US govt or US people.

- The US currency, ie. the international currency, historically was legally redeemable with Gold. Now the US currency is not backed by gold. Sure, you can buy gold with it, it is about US$1000. But what happens when currency gets hyper inflated?

- A few different sources suggest owning some gold for protection in case of the extreme scenario of global economic collapse. Here is where I welcome your advice. How do you own GOLD. Please not that buying Gold derivative is risky, and also Gold stocks like GOLD (ASX code: GOLD) are still not guaranteed in the event the company that provides it collapse. So what are the best options of owning physical gold?

For more details on my investigation, please see:
http://ozstock.blogspot.com/2009/12/on-catastrophic-collapse-of-dollar.html

Happy New 2010.