RiskAverseAlert

The Market Bubble Is About to Pop

"Nonetheless, it is clear that, for the next 10 years or more, money will be made by those who invest in the hard stuff – commodities – and the emerging markets."

I disagree.

In a period of de-leveraging money will be made nimbly taking positions in the most liquid markets, playing both sides of the trade. Per any "buy and hold" strategy, the best performance one can hope for during a time when leverage is contracting is to pick the investment that loses less than others.

Likewise, there is no way emerging markets are going to escape the chaos of a de-leveraging whose course has only just begun. So, why take the currency risk? Name me a country whose currency is backed by more tons of fissile material and I might be persuaded the U.S. dollar can be orderly replaced as the world's premier reserve currency within the confines of the current arrangement among nations trading with one another.