kidmercury

Morgan Stanley issues a paper on hyperinflation.

More economists warn of a depression.

Jesse on the bottom in housing.

At this point I'm expecting dollar devaluation to hit in Q3 of 2009, which is becoming an increasingly popular estimate amongst inflationists. It remains unclear as to how bad inflation will get and how long it will last. Those will be critical questions, though I expect things to be worse than the stagflation of the '70s -- much worse. How bad inflation gets will depend largely on when the Fed recognizes the problem and decides to raise rates. Rate hikes will create other problems, though, so ultimately there is no quick fix. The only way out is through a re-building of private savings and investment of those savings in startups. Government can only intervene to re-allocate wealth, typically from the common taxpayer to the government lobbyists.

In terms of trading, I'm short GBPUSD now. January was my first losing month trading currencies in a while; I was down 0.6% in currencies, though gold and silver were up significantly, so overall marked to market I was up. Expecting the pound to continue falling significantly; I'll probably be trading pound weakness until it becomes time to trade dollar weakness.

Gold is at $900 an ounce at the time of this writing. It's been in a bull market since 2001. And this is just the beginning. I got long at $850 a few months back and continue to accumulate slowly, and am expecting to hold until some time in 2012.

Consider getting some gold.