I received an email from John Griffith who wrote:
I am considering moving 50% of my investments from the US to selected (non-Euro) countries such as Canada, Australia, and Norway to compensate for the declining USD, the expected slow “real” US recovery, and loss of faith in Wall Street practices. What are your thoughts on this strategy?
With the Federal Reserve (Fed) embarking on their latest round of monetary stimulus and the European Central Bank’s (ECB) latest bond-buying program, moving a portion of your investment out of these two regions might be a sound decision.
I expect the USD to decline further in value in the long term which will have an inverse effect on the prices of commodities. This means that I expect the price of commodities to soar in future. With that in mind, countries that are rich in resources such as those you mentioned – Canada, Australia and Norway – are expected to reap the benefits of increasing commodity prices. Diversifying some of your investments in these countries should help in mitigating the possible deterioration of the US economy and the worsening Euro Zone sovereign debt crisis.
I will not delve into what kind of investments you should diversify in, but it suffices to say, it might be prudent to have some percentage of your investments in physical Gold and Silver. As Central Banks around the world continue their attempt to bring about economic growth by flooding the market with more money, we might experience inflation and maybe even hyperinflation in the future. Physical Gold and Silver are increasingly recognized as a store of value as they are finite in amount. Thus, they cannot be debased like currencies.
To your success as a profitable trader,