Following reported opinion from Marc Faber and others that we may expect sell-offs in commodities, bonds, equities and real estate, and given concerns about the quality of our currencies, the question arises, where should we hold our cash?
It seem that in the USA and UK, we are holding down interest rates to avoid crippling homeowners, the home-loan-based economy, and what's left of our industries, and also in the hope that we can repay our debts to foreigners with devalued cash. On the other side, countries like China and Japan seem to be trying to prevent their currencies from appreciating, so as to preserve their trading advantage.
So one party is letting their currencies sink, and the other is trying to stop theirs rising. To this amateur, the world's foreign exchange system looks like a bunch of corks tied to an unchained anchor and flung into the sea. Will the string on the corks hold, or break under the strain, or be abruptly cut?
Is there any computer- or board-game-based model of the world economic system, that might make it clear to me how this wretched thing works?
And how is the ordinary person to save money and preserve its value in real terms, without having to be super-sophisticated? I know something about American TIPS and British NS&I Index-Linked Savings Certifcates, but I'm leery of handing the government what little money they haven't already extracted from me in taxes. And I don't trust them to define inflation fairly.
Does anybody know how this boneshaker of a contraption actually operates, so we can make sensible decisions?