I’m not jumping into gold right now. I think we have a major global asset bubble that needs to have some air let out and gold will be hit.(my opinion) If you are going to keep your money in dollars the TIP is a safe play. The problem with this investment is the dollar keeps falling and I don’t see any fundamentals to stop it. Just because so many people are negative on the dollar isn’t enough for me to believe in any kind of sustained rebound will occur. I think we will have short aggressive bounces but that is all they will be until our economy starts to recover and we stop cutting rates. The one caveat to this is a massive aggressive sell off and a flight to quality in the world markets. This will cause a large bounce in dollars since it is still the reserve currency. I am ready and prepared to jump back into the dollar if I see early signs of this happening.
The strongest trade I think right now if you believe a credit event is coming and we will have a large drop in global markets is the Yen. I don’t have time to get into all of the reasons for this but I would recommend doing some research into the Yen carry trade and getting a handle on why the yen will see big jumps when markets sell off. The Yen has moved quite a bit since I got in at 115.00 so I wouldn’t jump in right now. Wait until we see another suckers rally for a while then average in.
Of course, don’t put all of you eggs in one basket. The yen is a spec trade so take that into consideration. If you want to be very conservative the TIP play is a safe bet. Just don’t plan any trips to Europe in the near future. I went to Zurich in October and it was eye opening how weak the dollar is.
