So buy oil and gas ETFs and the Euro and Swiss Franc ETFs.
This is a sucker’s rally for the rest. China and Asia’s economies might pick up and if the world economy picks up a little - oil is back to $4 a gallon.
you mean gas or oil?
Certainly will be. And then we are screwed with an administration that is blocking drilling everywhere, not just offshore. And with Obama's "green energy" fantasy that is 15-20 years away at best, the American consumer is absolutely screwed. The only upside is, so will Senate Democrats in 2010 or Obama in 2012.
Stock indexes do very poorly vs inflation. There are always individual companies/industries that may thrive in any kind of conditions, but broad-based indexes like Dow Jones & S&P500 do not react well to inflation. See this paper:
Inflation Hedging for the Short-Term & Long-Term
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1394810
When there is a sudden outburst of prolonged inflation:
* Commodities outperform all other investment classes for 6-18 months, all other asset classes lose value or are flat.
* During the 2-5 year range (after the beginning of an inflation shock) commodity prices start to level off or decline after a big run-up, long-term & short-term bonds start doing better due to high interst rates. But stocks tend to still stay flat.
* After 5 years, stocks, bonds and short-term bonds (cash) start to perform better & regain their historical risk-return tradeoff.