“Today people who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value." Warren Buffett
While Buffett said this quite some time ago, it’s a good reminder that cash -- the safest of asset classes in the short-run -- is a guaranteed loser in the long-run due to the inevitable effects of inflation. This reality ties into something I’ve been contemplating a lot lately: The fate of the US dollar, and the fate of gold. Both items are at rather critical junctures now, and likely to embark soon on big moves one way or another.
Here’s the dollar on a weekly bar chart going back a couple of years. We can easily see support from early-2012 near 78, late-2012 just under 79, and again early this year at 79, all connected by an uptrend line shown ... Log in or subscribe to continue reading.
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