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The Sky is NOT Falling: Lessons from Zimbabwe

|Includes: DBA, FXE, SPDR Gold Trust ETF (GLD), SLV, USO

"Fear and Greed"  An oft quoted saying about what moves the markets.
We have currently experienced an immense run up in the price of gold (and silver).  I stay focused on gold because it is considered the reserve currency.  There is a much bandied about story of the currency collapse of the US dollar.

I seriously doubt it will happen since its currency is still stronger than many other major currencies.

But let us consider the alternative, that the currency does collapse ala Zimbabwe.  Let us say, that the collapse started, as the linked article says, in June 2008.  What happened to Zimbabwe?  Let 's look at a very simplistic statistic, the DEATH RATE.

Apparently, the death rate has fallen since the collapse.  Now I am not implying that the two are linked, what I am saying though is that the currency collapse can not even be correlated with an INCREASE in the death rate.

If Zimbabwe can sustain a currency collapse with a lack of education and literacy, poor infrastructure and a bandit government, do we expect the West to fair worse?

I think that the smart money has capitalized on the fear, to fuel their greed and they know the fear story is pretty much over.  Yes, the US dollar will suffer set backs but is anyone going to abandon it?  The US dollar will not be abandoned until all the cheap real estate that is now available is purchased.  That in itself will firm support for the dollar.  The printing of US dollars have made so many wonderful US destinations more accessible either for tourism or real estate purchase.

There is no shortage of wealth out there.  The smart money will move out of gold and back into dollars to purchase assets that will appreciate faster than gold.

The sky is not falling and the sun will be shining.