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George Soros appears baffled. The commentators out there all are operating from the incorrect frame of reference. The last 20 years of bubblicious interest rates and progressively more systemic bailouts have caught up to right in the rear view mirror. I agree with Soros. Something big is in the making. When you have no idea what is coming, financial advisors will incorrectly advise you to allocate across various "investments" that they take a portion of for managing. Did you know that the definition of an investment is putting money into something with an expectation of gain? Did you know that most people lose money in the stock market? Thus, most people are not investors. It makes you wonder: Who is an investor? Soros, who said at an unnamed conference in April:

There are clearly a number of unsustainable situations which nevertheless continue, and the authorities don't necessarily try to solve them, but merely try to buy time. We live in this situation without an immediate collapse or an immediate solution confronting you.

Well, he sold gold and bought the dollar. What this means is that George isn't scared of deflation enough to stay with gold. If you can imagine a period of time where stock prices as a whole go down 10%, I would argue that the relative purchasing power of the US dollar -- on a relative basis, all other things equal -- would have increased by 10%. Cash is king if you're forecasting unprecidented uncertainty. What kind of cash do you want to own? I've covered my distaste for the euro in the past because the euro zone is a sinking ship -- and unlike the US, it cannot monetize its deficits but simply gets the thrill of being overwhelmed by its debts. I see a contagion in the pipeline where not only people cut out from the system, but institutions start panic jumping.

Things could go this way. Soros is positioned as if they might. The other side of the coin is that Soros is a little early on this trade. Although it is feasible for the euro zone to make it out of this alive, it's certainly playing the game of politics -- and that dynamic is going to lead to a situation that is "Too Big to Bail Out." What then?

Until then, play it safe like Soros. Raise cash in currencies that are safe-havens or that would rally if China had a hard landing and/or Europe takes a dive.

Disclosure: I am long UUP, EUO.