The USD permabears believe that we will simultaneously see a dollar collapse against all other currencies and gold in the midst of a deflationary crash.
In their estimation, stocks, bonds, and real estate will collapse while commodity prices (especially physical gold & silver) will skyrocket.
The shred of evidence that they have to predict this set of outcomes is the strong performance of Homestake Mining after the DJIA bottomed out in 1932. The USD was of course taken off the gold standard that year, and FDR and Treasury Sec. Morgenthau engaged in outright manipulation of the gold price, to break the back of the “barbarous relic”...
Many stocks, such as Curtiss-Wright, GM, Bethlehem Steel, and RCA outperformed HM during the same period. The attempt by the Fed and Treasury to counteract deflationary pressure with monetary and fiscal policy produced a strong rally in stocks, just as it did in the hyperinflations in Germany and Hungary.
Look at leading Russian stocks over the past few weeks- strong rallies as the Rouble was collapsing. Equities tend to be a better store of value during reflation attempts.
My view:
The permabear logic makes no sense.
During a deflationary downdraft, why wouldn’t one want to be long bonds and short gold?
During the attempted reflation, why would one not want to be long equities and corporate debt?
There is only one indicator you need to follow to know what is coming and that is the BDI (Baltic Dry Index). And its not looking too good.