[quote]D Public wrote:
well this is obviously just a prediction…so take it for what it is…
I think a massive US recession is going to occur…far worse than the other countries…
in the immediate short term, the dollar and treasuries will rise as people pull out of the global market and run torwards safety(Treasuries and US dollars)…but, then when they realize that treasuries and dollars are overvalued, I expect the demand for treasuries and dollars to fall as investors run torwards safer investments with higher returns…which i believe are the emerging markets…
So, the devaluation will be due to a long term lower foreign demand for dollars…effectively reducing the value of dollars…
Basically people will run torwards the most growth when their own economies contract upon themselves…[/quote]
While I agree with the overall flavor of you post, I do think that there are a couple of flaws.
And this too is only an opinion.
The recession that we are entering is global in nature and will leave no country untouched. Europe will feel it worse than the US, however this is only a relative estimate. It will be bad enough for everyone. The EU will not survive it and therefor the Euro will be gone long before the dollar.
As the dollar is the reserve currency of the world, as deflation takes hold there will be a rush towards dollars to pay and retire debt. I don’t think inverters will be as worried about high return investments as they will be simple preservation of capital.
Or I might just be full of shit.