Up until this Fannie/Freddie bailout fiasco, I was still a bit on the fence about gold and the dollar – thought that gold should continue to go up, dollar should continue to go down – but hated essentially selling the US short. And I kept rechecking my assumptions, trying to think of ways the US economy would turn around next, and how it would save the dollar.
Well yesterday I flushed those theories straight down the shitter. It’s now clear to me that our gov’t has absolutely no regard for our currency, and is only focused on short term fixes. And these short term fixes are going to damn the dollar – there’s just no way around it.
I feel fortunate in a couple of ways. I had a similar gut feeling about the stock market in late January, and moved both of our 401K allocations into inflation indexed bonds. I felt stupid for a bit, since my timing was bad and I did it right before the fool’s rally – now I feel very fortunate that I got out when I did.
Well I’m in the process of rolling over my 401K into a commodities brokerage IRA, so that I can put it in some hard assets. Meanwhile I’ve been inching my wife’s allocations into this gold fund offered by her employer (what luck that is) – first just 10%, then up to 30% – and yesterday, I just moved the whole damn thing into gold.
Batten down the hatches, it could get very ugly – in fact, I think odds are it will get ugly for the dollar. So for me, it’s time to heed Jimmy Rogers’ advice, and get out of the dollar. It is, after all, a very flawed currency, as he says.