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RE: Why The Weak US Dollar Trend is about to Turn STRONG (in photos)
Or the collapse of the European Union become more likely, which will weaken the Euro and as a results creates a stronger US Dollar. The elections next month in Germany will be very important, because without a strong mandate for Angela Merkel Europe will look weak. Besides, the German car crisis is about to take off and when the engine of the EU is coming to a halt, i wonder how long the Euro will last.
I strongly agree with that. USD is not going to crash anytime soon. A crash of the EU (which will come first) would send a ton of money into US Treasuries and a flight to safety. USD will make huge gains before dying a slow long death sometime in the future.
Well, i think equity's are or will be considered a saver haven. Like the Swiss central bank is buying US stock. After all, when the EU falls apart, the first thing which will collapse is the European Bonds market. Money will probably move to the USA, but in the end, while the US is slowly losing economic power through internal struggles, the capital will move further east.
Good point about capital continuing to move further East. I am not sure about the equity's though. During the last financial crisis equity markets around the world got crushed. When QE was introduced they soared. If Central Banks are able to do any type of QE, then yes. But I think they are out of ammunition. My thoughts are if we crisis hits the monetary system is revamped creating a new type of currency or basket of currencies. After all of that is resolved the equity markets would resume their climbs.
I understand your reasoning, but when investing let's say 10.000 usd. You feel more secure holding 10k at your saving accounts or buying shares in a strong, money making company? I choose the latter and in case of hyperinflation, your money become worthless, healthy company's will survive the crisis, excepts some banks.