White Devil i'm looking towards you on this one (others are welcome though) . . .
- Thread starter ColdBlooded
- Start date
Gold, gold, gold - It is a play on the American dollar and currency that is leveraged to the dollar, as well as a play on American stability. We have seen new demand in the past four years that has been somewhat unique in the history of gold spot trading, and this has also given gold its upward momentum.
TIPS - Treasury Inflation Protected Securities. These pay a variable premium in addition to the current rate of inflation...so if inflation is 4 percent, and the current TIPS premium is .75 percent, you will get a 'coupon' of 4.75%. Bond markets are heavily tied to interest rates, so this is one bond that will generally do well during periods of stagflation or increased inflation.
Global Investing - Emerging markets tend to do well in times of American floundering. Investing in Latin America or Russia over the past five years, for example, has led to returns for some of nearly 50% a year on average.
Commodities - Commodities are a great way to offset US equity holdings. Gold, Steel, Copper, and Oil very much tends to zig when American markets zag, and a stagflation situation would be no different. This is also a time, historically, when commodities tend to do very well, although in my opinion most commodity prices at this point are quite high.
TIPS - Treasury Inflation Protected Securities. These pay a variable premium in addition to the current rate of inflation...so if inflation is 4 percent, and the current TIPS premium is .75 percent, you will get a 'coupon' of 4.75%. Bond markets are heavily tied to interest rates, so this is one bond that will generally do well during periods of stagflation or increased inflation.
Global Investing - Emerging markets tend to do well in times of American floundering. Investing in Latin America or Russia over the past five years, for example, has led to returns for some of nearly 50% a year on average.
Commodities - Commodities are a great way to offset US equity holdings. Gold, Steel, Copper, and Oil very much tends to zig when American markets zag, and a stagflation situation would be no different. This is also a time, historically, when commodities tend to do very well, although in my opinion most commodity prices at this point are quite high.
Sugar is definitely a wise investment, as most commodities are right now. However, if we see a period of hugely declining producivity and inflation, alt. fuels will most likely take a shit, at least in American markets. The implementation of alternative fuels is reliant on an R&D cycle that postpones profits while technology, infrastructure, and consumer confidence is developed.
If the flex-fuel switch is made sometime soon, sugar would be an even better investment. I do have reservations about buying sugar right now, though. I'd wait for a selloff before moving.
If the flex-fuel switch is made sometime soon, sugar would be an even better investment. I do have reservations about buying sugar right now, though. I'd wait for a selloff before moving.
It is. Historic demand has not been largely based on actual gold trading, only the concept of the price of gold as a function of the price of the dollar. The demand from India and China has actually been for "physical" gold.
And as for the gold/oil correlation, gold prices move up with oil prices because the US is a gas-hungry economy, and increased oil prices leads to real or imagined fears about growth slowing, thus, the price of gold increases. Gold and the DOW, also, usually tend to have an inverse relationship. These past few years, however, have bucked historical trends.
And as for the gold/oil correlation, gold prices move up with oil prices because the US is a gas-hungry economy, and increased oil prices leads to real or imagined fears about growth slowing, thus, the price of gold increases. Gold and the DOW, also, usually tend to have an inverse relationship. These past few years, however, have bucked historical trends.