world debt crisis, page-23

Rivkin

Where have you been the last 5 years since you last posted on 24 May 2006? In cash?

Nice post.

Just a few points.

1. I think US GDP is around USD15 trillion and its debt is getting close to 80% of its GDP.

2. China has linked its currency to the USD (but is very slowly allowing some appreciation) so on the whole it is basically devaluing its currency near the same rate as the US is doing (for now). Hence the bonds it owns in the US are not being devalued by the extent of the USD depreciation. In fact China is deliberately parking its money in US bonds to keep down the value of its own currency as the USD depreciates.

3. Being in cash has its problems if we have high inflation. Also you miss out on short-medium term speculative opportunities. This is a market for being very selective and not having a buy and hold mentality. Perhaps buying in August and selling in February/March could work well, with the rest of the year being in cash.

Please keep posting. Hotcopper has become too quiet lately. Perhaps a sign of the times.

loki (gloomy semi-speculative goldbug)