The Contrarian Investor thinks that rather than face economic depression, voters will force the US government to destroy wealth by hyperinflation. The arguments are therefore not economic but political.
I'm not so pessimistic; and if I were, investing in gold would be of less concern than physical survival.
3 comments:
Hi!
To be honest, I am not sure whether to be that pessimistic or not. Also, there are many levels of pessimism:
(1) Will the hyperinflation route be so ugly that there will be complete breakdown of society and social order? In that case, physical survival, as you said, will be the top priority.
(2) Or maybe there's some hope that some kind of order will still prevail despite the dire economic situation (whether hyperinflation or deflation)? In that case, gold may still be handy to keep.
It all depends on who is in charge in America, especially after the 2008 election. If we have a weak populist as president, then all bets are off.
Hi, and thank you very much for dropping by and troubling to comment.
Hyperinflation may or may not be the trigger; but we do face a systemic crisis that is much more than financial. The implications of Olduvai theory are far-reaching.
I agree that the quality of political leadership in the near future will be very important. Do you feel that any credible Presidential candidate has yet shown an understanding of the big issues?
So far, Republican senator Ron Paul has a good understanding of sound economic principles. Other thing else, I'm not sure.
But as you said, the issue is more than just economic. Even if Ron Paul managed to get himself elected as President, there is no guarantees that he can have the political strength to mow down the status quo and numerous self-interest groups.
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