Risk of US Currency Devaluation*
At some point the ramp up of dollars meets and exceeds demand, and the cycle of inflation begins again. If the situation is particularly dire, the currency may be devalued to speed its supply as the US did in 1933. But without a new Bretton Woods type currency fix an inflation alone is much more likely.
As an aside, we think the Europeans should declare a force majeure and allow all non-euro debts, even in private contracts, to be settled in euros as part of a formal rejection of the US dollar as the world's reserve currency.
But these are all exogenous developments. For now, within a degree of probability, the US is on the road to a significant failure of its currency and debt, most likely through a nasty bout of inflation, selective bankruptcies, and ultimately the reissue of a new currency.
Searching for relative safe havens of value for wealth, as it had been in the 1970's, may be the premiere investment theme for the rest of this decade, and some part of the next.
Duck Diversified is 80% in cash and 20% hedged in gold bullion.
We have zero debt, no long term obligations, ample credit, and established commercial banking and investment accounts at major institutions around the world.
The outlook for Entertainment is a dice roll. It always is.
* Charts and market commentary reproduced from
http://jessescrossroadscafe.blogspot.com/2008/11/is-money-supply-contracting.html
http://jessescrossroadscafe.blogspot.com/2008/11/thinking-unthinkable-is-bond-market.html
http://seekingalpha.com/article/105223-tuesday-outlook-commodities-emerging-markets