Three card monte

(picture source)

Frank Barbera points out that Argentina's economy put itself back on track by devaluing the currency. Now,

... the place is booming, crime is way down, and foreign capital has flooded in...

All you had to do was ensure that you weren't the mark in that game:

... someone who was able to place money in precious metals avoided the collapse of the local currency, would now have that previous purchasing power intact, and could have used it in the last few years to buy back many fold depreciated assets in Argentina.

Red speckles

Paul Nolte (Financial Sense yesterday) strikes a more judicious note. He points out that house price drops do not hit everybody equally, since not everyone has extracted equity and not everyone needs to sell:

... real estate is not like buying 100 shares of Cisco in early 2000 and watching it drop 80% - everyone loses the same amount, very unlike the real estate market. The point – the real estate market is not like the stock market bubble and will take a much longer time to work out – our best guess is an initial bottom is likely in 2009 and we won’t see a meaningful turn higher in overall real estate prices until sometime 2011-2012.

Similarly, there is opportunity for people to cut back on energy consumption in response to higher oil prices.

He expects a bit of a pullback in commodities and precious metals, and currently tends to prefer bonds to stocks.