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The central banks and politicians (over)reaction to the coronavirus scare have left a real dilemma for investing and preserving wealth. The current situation could easily produce either a major deflation or a runaway inflation. Holding cash in the first situation is great but could be disastrous in the second. Virtually every asset class has the same situation, they could move dramatically depending on whether we have inflation or deflation and how massive whatever comes will be.
We have been into rental real estate, but the economic situation could crash property values. I saw a survey a day or two ago saying that half of American homeowners were considering selling their houses due to economic hard times from the coronavirus lockdown. The real estate market could easily turn very sour.
We are upping our precious metal holdings but in a deflationary cycle that could go down like everything else, so we will only go so far with that.
In terms of holding cash, the question is which currency. We want to be diversified from the dollar especially if the election goes sour. The euro has its own problems, and is as risky as the dollar. At one time, the Swiss franc would have been the obvious answer, but in recent years, the Swiss central bank has deliberately depressed their currency so they would not get so far ahead of the euro, since the EU is the major trading partner and that would put a real hurting on their exports. Scandanavian kronor are a possiblity as is the Australian dollar.
The huge question is what lies ahead, inflation or deflation, and at what level?
We have been into rental real estate, but the economic situation could crash property values. I saw a survey a day or two ago saying that half of American homeowners were considering selling their houses due to economic hard times from the coronavirus lockdown. The real estate market could easily turn very sour.
We are upping our precious metal holdings but in a deflationary cycle that could go down like everything else, so we will only go so far with that.
In terms of holding cash, the question is which currency. We want to be diversified from the dollar especially if the election goes sour. The euro has its own problems, and is as risky as the dollar. At one time, the Swiss franc would have been the obvious answer, but in recent years, the Swiss central bank has deliberately depressed their currency so they would not get so far ahead of the euro, since the EU is the major trading partner and that would put a real hurting on their exports. Scandanavian kronor are a possiblity as is the Australian dollar.
The huge question is what lies ahead, inflation or deflation, and at what level?
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