I own the dollar, since I expect more turmoil to come, and when it does, people will flee to the dollar because they think it is a safe haven. It is not a safe haven. In case of turmoil, and people flocking to the dollar, I would look to sell the currency as on a long-term basis. It does have serious problems.
I also own the renminbi and I am not selling it. I’ll buy more if it dips from the current levels. The fundamentals for the renminbi are less unsound. I also own the Japanese yen because a lot of people are negative on it. I do not own the rupee because India has big debt-related issues, balance of trade and inflation problems.
I own gold and I am not buying it now. But if there is war, yes! I would be buying gold if it goes higher. But I don’t expect so. I am looking to buy gold on a decline. I do not know how low. Gold has not had a 50 per cent correction in 13 years and that’s very unusual. If gold prices corrected 50 per cent (and that’s not a prediction) and slip below $1,000 an ounce, I would buy more. But I am not buying gold at the moment.
I prefer agri commodities at the moment because their prices are down and have been down from a long time, which is leading to fundamental distortion in agriculture. Inventories, worldwide, are near historic lows as we have been consuming more than we have been producing.
More, we are running out of farmers worldwide. The average age of farmers in the US is 58, it is 66 in Japan, etc. There are very few young people going into agriculture. The world is facing a serious problem as regards agriculture.
If war breaks out, there is no top for oil prices. Who knows how high it would eventually go? I don’t expect war anytime soon. But if it does happen, then one should definitely own all commodities, especially oil. Even without war, oil prices can move up, since oil reserves in most of the world are on a decline. The world is facing serious longer–term oil energy problems down the road.
