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Wednesday, September 24, 2008

Looking forward: the US fiancial quagmire

It takes no genius to see that US is in very bad shape and it has been brought on by BAD policies and BAD economics. A corrective phase should see a voluntary slowdown and cleansing of the system of the toxic assets.

Unless the Congress DECIDES that they are better off with a year of slower or negative growth and refuses to fall into the Paulson trap which in effect will only bail out the fat cats with Tax payers money, they will be digging a hole so deep that it will take a couple of generations of Americans to get out of.

However, if the Paulson ploy succeeds and the congress agrees to the idea, US is in a bigger stink hole than it is in now. Crude will start its up journey and God knows what limits it will touch this time hurting both the American and the global economy.

Only bright spot, buy Gold.

I believe, come what may, investment in Gold is going to give u returns safer and better that any other asset class as of this point of time.

Let the fools get themselves stuffed with debt even more. The more debt they take, the more weak dollar will become. After all, its only the “perceived” credit worthiness of the US that enables the other nations to buy the US paper.

The global currency scene looks to get so murky that it will be impossible to take any predictions for exchange rates etc. asset allocations are going tomake a mockery of all what we see today, and the shifts will be led by Hedge funds and followed (reluctantly and/or in panic) by sovereigns.