P!
can you see the question marks floating over my head, like they always do in the first milliseconds after I encounter a nuclear non-sequitir?
I think we should be more worried about ONGOING problems like the Euro crisis and the possibility of an Italian default, not hypotheticals.
This shift in economic power from the West to Developing economies is accompanied by a shift in political and military power. The West will not just sit there and do nothing – the Libyan expedition is the ‘first shot’. The Western world will want to control the oil flowing to China from the Middle East. Then it will come to war – and you definitely don’t want to own US government bonds then!
In the worst scenario, you don’t want to be in dollars and government bonds.
Seems the world is awash in debt - not a good thing for holding bonds... but getting into equities feels scary. Faber's probably right ... usually is.
I've heard it cited that less than 10% of investors have diversified a portion of their nest egg into gold, one of the best performing assets over the past 10 years. Financial analysts resist the archaic, unproductive asset, but instead steering risk-averse investors into negative return treasuries or even blue-chip stock.
Gold is not in a bubble, it is merely retaining value against many a severely declining fiat currencies. The Swiss franc has gone up 30% over the past year in terms of the US $ - a bubble?
At Kitco go check out the currency chart of the Swiss Franc vs. US $ (bottom of page), and gold priced in Francs.
Just the US lying, thieving government at work.